Aetna reports 52% surge in second quarter profit

Aetna's government business in Medicare and Medicaid, and its exit from numerous Affordable Care Act exchange markets helped propel the insurer's second quarter profits by 52 percent over last year.

Aetna reported second quarter profits of $1.2 million, compared to $791,000 for the same period in 2016.

[Also: Aetna reports $381 million loss in first quarter due to failed Humana merger]

"Specifically, operating results in our government business remain robust with government premiums representing more than half of the total healthcare premiums," CEO Mark Bertolini said during the August 3 earnings call. "Medical cost trends remain moderate and we experienced favorable development of prior period healthcare cost estimates across all of our core products in the quarter."

Helping to cut medical claims costs was a decision by the Hartford, Connecticut-based insurer to cut its participation in the ACA market from 15 states last year to a current four states.

[Also: Aetna to move out of Hartford, CT to New York City]

In June, Aetna submitted bids to the Center for Medicare and Medicaid Services to expand Aetna's reach from 56 percent of the Medicare population to 60 percent in 2018, according to Bertolini.

"As we discussed previously, our goal is to accelerate our geographic expansion in 2019 and beyond to serve more of this growing population," Bertolini said. "Continuing on with our government business. Medicaid delivered another solid quarter, including stable revenue and underwriting results compared to the prior-year period, despite the exit from Missouri during the quarter."

Aetna serves approximately 2.1 million Medicaid members, a decrease of approximately 250,000 compared to last year, due to its exit from the Missouri Medicaid program.

"Based on our continued outperformance, we are once again increasing our full-year 2017 earnings projections," Bertolini said.