- Summary: Aetna Inc. (NYSE:AET) reported trouble for the second straight quarter in raising premiums quickly enough to keep up with rising medical costs. The disclosure surprised investors and sent the company's stock tumbling 17%. Investors are concerned that increased competition for health-plan enrollment is causing Aetna and other insurers to bid too low for new business, eroding their profit margins. Three months earlier, Aetna's stock fell 20% on similar fears after its first-quarter earnings were announced. Aetna said net income slipped 1.4% from the year-earlier period to 67 cents a share. The latest results included a debt-refinancing charge and the write-off of an insurance recoverable related to a prior-year legal settlement. The drop in earnings came despite an increase in revenue, which rose 14% to $6.26 billion. Shares of other managed-care companies moved lower as well, with UnitedHealth Group (NYSE:UNH) down 2.1% and Cigna Corp. (NYSE:CI) sliding 8.4%. Cigna reports its second quarter on Wednesday; UnitedHealth reported higher quarterly profits last week.
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