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Aetna, Inc. (AET)

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  • Dec. 22, 2013, 4:55 AM
    • Tomorrow is the deadline for people to sign up for health insurance that is due to take effect on January 1.
    • However, much uncertainty exists among insurers and consumers, due to government decisions to delay some of Obamacare's most important provisions, a result of the fiasco that has been the Healthcare.gov Web site, which suffered a three-hour outage on Friday.
    • The latest change is allowing anybody whose current plan is illegal under the new law to buy "catastrophic coverage", whereby benefits are limited and the deductibles are high. Those plans were initially supposed to be restricted to people under 30 years of age.
    • President Obama said on Friday that over 1M Americans have selected new health-insurance plans through the new exchanges. That's well below the initial target of 3.3M by the end of December.
    • Industry trade group Health Insurance Plans said its members will give consumers until January 10 to pay the first month's premium of a plan as long as they pick a scheme by tomorrow night. The move follows a request from the White House for insurance companies to be relaxed about the various deadlines.
    • The NYT profiles how Obamacare has hit those in the middle class who earn too much to be eligible for subsidies. "In some places, prices can quickly approach 20% of a person's income," the NYT writes. "Experts consider health insurance unaffordable once it exceeds 10%."
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 17 Comments
  • Dec. 15, 2013, 3:43 AM
    • Health insurers are continuing to receive error-strewn information from the government's HealthCare.gov Web site as the starting date for Obamacare coverage of January 1 draws closer.
    • However, the government maintains that the problems stem from data that was transferred to insurers in October and November, and that information passed over this month is accurate.
    • The government wants insurance companies to take a relaxed approach to the various deadlines and consumer coverage-issues that may crop up until all the kinks are ironed out, but whether the firms will comply is another matter.
    • Either way, bureaucratic chaos is expected to reign come the New Year.
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 8 Comments
  • Dec. 11, 2013, 12:08 PM
    • "Any hopes of a roll-back of the 2% Medicare sequestration cuts were dashed as more details of the plan were revealed over the course of the evening," Deutsche's Scott Fidel notes, referencing the new U.S. budget agreement.
    • "In fact," Fidel continues, "under the budget deal the 2% Medicare payment cuts will actually be extended by two years through 2023."
    • Nevertheless, Deutsche doesn't think anyone was expecting much in the way of a roll-back anyway, and as such, the bank sees limited impact for MCO names.
    • AET, CI, HNT, HUM, UNH, WLP
    | Comment!
  • Dec. 10, 2013, 3:24 PM
    • Barclays is out with its top equity picks for 2014.
    • The firm's top healthcare name is Overweight-rated Regeneron (REGN -0.4%), which Barclays says should "continue to gain share from both Avastin and Lucentis in the AMD space." Price target is $339.
    • Other picks: AET, HCA, GILD, COV, ACT
    | 3 Comments
  • Dec. 8, 2013, 4:58 AM
    • The government's HealthCare.gov Web site for Obamacare was failing to accurately transmit around 10% of applications to insurers - as of Friday - although that represents a vast improvement on the error rate in October.
    • Still, up to 25% of the enrollment records for people who bought coverage in October and November could contain mistakes, raising doubts about whether those customers would be insured if the policies take effect from January 1, as scheduled.
    • Meanwhile, insurers are working with the Centers for Medicare & Medicaid Services (CMS) on a short-term back-up system that will enable the government to pay the firms for the income-based subsidies that many consumers qualify for under Obamacare.
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 3 Comments
  • Dec. 6, 2013, 4:16 PM
    • Aetna, Inc. (AET) declares $0.225/share quarterly dividend, 12.5% increase from prior dividend of $0.20.
    • Forward yield 1.37%
    • Payable Jan 31; for shareholders of record Jan 16; ex-div Jan 14.
    | Comment!
  • Dec. 2, 2013, 3:18 AM
    • The White House said yesterday that it has achieved its target of improving the HealthCare.gov Web site so that it works "smoothly for the vast majority of users."
    • Officially, the portal is now operating over 90% of the time vs 40% at some points in October, the loading time is much faster, the error rate has dropped to 0.75% from 6%, and the site can handle 50,000 users at the same time.
    • However, the latter claim hasn't been tested in the real world, and some in the government reportedly aren't certain the site will hold up.
    • The back-end systems continue to be a problem, with one result being that while some consumers believe they've bought coverage from insurers, the latter don't have any records of the transactions. One detail that the government didn't provide was how many people are completing all the enrollment steps.
    • The next deadline is the middle of this month, by which time consumers need to have signed up for coverage that starts on January 1.
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, HUM, UNH, WLP, MOH.
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 2 Comments
  • Nov. 29, 2013, 5:21 AM
    • Tomorrow is the White House's self-imposed deadline for the federal HealthCare.gov Web site to be working properly for 80% of users.
    • However, "navigators" whose job it is to help people sign up say that problems persist. It's "kind of hit and miss," says one, although "there have definitely been more hits lately than in the past." The COO of Enroll Alaska rates the site 4/10.
    • Molina Healthcare (MOH) has expressed its support. "It is easier to navigate. It's working better. It's faster," Molina said.
    • More problems for the portal could lead to millions of Americans to decide to forego buying coverage and swallow the fine instead.
    • The participation of the young and healthy is particularly important to the success of the insurance exchanges.
    • Should the problems continue, the government might come under pressure to extend the March 31 deadline for open enrollment, a move that insurers have warned could undermine the market.
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, HUM, UNH, WLP
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 1 Comment
  • Nov. 25, 2013, 3:40 PM
    • "Because the President is looking for MCOs to work with the Administration in smoothing out the transition to the ACA, there is increasing investor perception that the sector may be to obtain some concessions in exchange for its help," UBS' A.J. Rice says, in a note on the managed care space.
    • Rice likes Aetna (AET +1.2%) and Cigna (CI +1.4%) based on "strong visibility on future growth, limited ACA exposure, [and] company specific catalysts," while UnitedHealth (UNH +0.3%) is also Buy-rated.
    • Price targets: AET, $82 (from $76); UNH, $84 (from $81); ELP $98 (from $87); HUM $95 (unchanged).
    | Comment!
  • Nov. 21, 2013, 9:29 AM
    • Aetna (AET) initiated at Overweight by Morgan Stanley. Price target is $83.
    • WellPoint (WLP) initiated at Equalweight by Morgan Stanley. See also: WLP to reaffirm guidance.
    • Cigna (CI) started at Overweight by Morgan Stanley. Price target is $100.
    • Humana (HUMstarted at Equalweight at Morgan Stanley.
    • Sorrento Therapeutics (SRNE) started at Buy at CRT Capital. Price target is $11.
    • Cardinal Health (CAH) initiated at Hold at Deutsche Bank. Price target is $66.
    • Charles River Labs (CRL) started at Hold at Deutsche Bank. Price target is $55.
    • althenahealth (ATHN) started at Buy at Deutsche Bank. Price target is $162.
    • UnitedHealth (UNH) started at Overweight at Morgan Stanley. Price target is $84.
    • Centene (CNC) started at Equalweight at Morgan Stanley.
    • Amicus Therapeutics (FOLD) cut to Neutral from Buy at Janney. Price target is now $2.50. See also: FOLD revises terms of Glaxo deal, outlines acquisition, financing.
    | Comment!
  • Nov. 21, 2013, 4:34 AM
    • President Barack Obama might have said that consumers will be allowed to keep canceled health-insurance policies for one more year, but at least five states - including New York and Washington - won't let such plans be reinstated, as they believe it would harm their exchanges.
    • Many carriers are also not allowing their customers to extend their old policies, due to time constraints and other obstacles. And those firms that may reverse the cancellations have said that premiums could rise.
    • Of the major players, Cigna (CI) could reinstate policies, while WellPoint (WLP) is analyzing the situation.
    • More on Obamacare.
    • Relevant company tickers: AET, HNT, MOH, HUM, UNH
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 5 Comments
  • Nov. 17, 2013, 3:00 AM
    • Aetna (AET) CEO Mark Bertolini was among 15 insurance chiefs who met with President Obama and reportedly expressed concern about his one-year reprieve for people whose policies were canceled because the plans didn't meet the requirements of the healthcare law.
    • The fear is that the move will make it more difficult to attract the healthy customers who are seen as critical to the success of Obamacare.
    • The CEOs at the meeting included those of Cigna (CI), WellPoint (WLP), Health Net (HNT) and Molina Healthcare (MOH).
    • The meeting came after Congress passed a bill that would allow people to keep their existing policies through 2014. While the measure received strong Democrat support, it won't advance in the Senate, although members of the latter chamber have proposed similar legislation.
    | 12 Comments
  • Nov. 14, 2013, 7:25 PM
    • Pres. Obama's administrative fix for health insurance cancellations may sound simple - allow insurers to extend their plans for another year - but it's anything but easy.
    • "Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers," says the head of the top insurer trade group. "Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace."
    • "The logistics of doing it with just a few days left in the policy year are extremely difficult," says a former CEO of Oklahoma's largest health system. The fix "shifts the blame and makes [the insurance companies] the culprits."
    • Aetna (AET) says it will need close cooperation from state insurance regulators to implement the fix.
    • Beyond the administrative burden, Citi analyst Carl McDonald says the change presents a risk of building a less healthy and less profitable pool of insurance buyers; the potential deterioration of the exchange market will pose a risk for WellPoint (WLP), Humana (HUM) and Health Net (HNT), which pursued aggressive exchange strategies for 2014.
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 35 Comments
  • Nov. 12, 2013, 4:46 AM
    • Fewer than 50,000 people had managed to enroll in private insurance plans via the government's problem-plagued HealthCare.gov Web site as of last week. The number represents less than 10% of the 500,000 people that had been projected.
    • Twelve of the 14 states that are operating their own exchanges have signed up 49,000. The total is therefore also well below the initial target, which was 800,000. The Congressional Budget Office's prediction of 7M enrollments by March seems like a distant dream.
    • Major health insurers are so concerned that they want to be allowed to sign up those who are entitled to subsidies directly rather than via the federal system. However, the administration isn't keen, due to privacy concerns.
    • Insurers: Aetna (AET), WellPoint (WLP), UnitedHealth Group (UNH), Humana (HUM), Cigna (CI), Molina Healthcare (MOH).
    • ETFs: XLV, XHE, VHT, FXH, IHF, IHI, IYH, PTH, RYH, PSCH, RXL, RXD, XHS.
    | 2 Comments
  • Nov. 5, 2013, 9:26 AM
    • Monness Crespi is out with downgrades for health insurers.
    • Aetna (AET), Cigna (CI), WellPoint (WLP), UnitedHealth (UNH), and Humana (HUM) are all cut to Neutral from Buy.
    • Most of the names are trading fairly close to their respective 52-week highs.
    • % below 52-week highs as of Monday's close: WLP -3.5%, AET -8%, CI -6%, UNH -9%, HUM -5.7%
    | Comment!
  • Oct. 29, 2013, 7:12 AM
    • Aetna's (AET) net profit rose to $518.6M from $499.2M.
    • Earnings include $0.09 per share of integration-related costs and $0.03 per share of net realized capital losses.
    • Operating revenues of $13B are up 46% on year, boosted by the acquisition of Coventry Health Care and growth in Aetna's underlying Medicare membership.
    • Total medical benefit ratio, or the proportion of premiums used to pay patient medical costs, rose to 83.1% from 80.7% a year earlier and 82.5% in in FQ1.
    • Added 200,000 members in the quarter to take to total to 22.2M.
    • Reiterates FY 2013 operating EPS guidance of $5.80-5.90 vs consensus of $5.89. (Previous) (PR)
    | 1 Comment
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Company Description
Aetna Inc. is a health care benefit company, which offers traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans.
Sector: Healthcare
Country: United States