Aetna, Inc. and UnitedHealth Group were awarded the North and South regions, respectively, for the TRICARE Managed Care Support Contracts. The two plans were chosen over the previous contractors, Humana and Health Net.
UnitedHealthcare, a subsidiary of UnitedHealth Group, has announced it will acquire Health Net of the Northeast, Inc. for total possible consideration of $630.0 million.
On average, health plan stock prices increased 6.2% for the month due. Ten of the fourteen health plans experienced stock price appreciation. Valuation indicators grew for the month of July.
Nine of the fourteen publicly traded companies announced earnings last month. Aetna’s operating income declined on higher health benefit costs, especially for commercial. AMERIGROUP’s net income decreased on declines in non-operating income and higher health benefits. Despite a surge in administrative costs, and a decline in medical ratios, Centene’s acquisition led to an increase in operating earnings. CIGNA’s operating earnings were essentially flat, the product of a decline in membership and a better health benefit ratio. Coventry revenue grew, mainly due to Medicare, largely offsetting margin pressure. While United margins were flat and membership down, operating profits increased on rate increases. Universal American’s net income declined mainly due to non-operating losses, though Medicare membership declined with its planned mix change. WellCare’s operating income increased on Medicare growth and a lower administrative expense ratio. The net income of WellPoint declined on membership declines and weak non-operating income.
Triple-S announced that it has completed its acquisition for certain managed care assets of La Cruz Azul de Puerto Rico, Inc.
Blue Cross BlueShield of North Dakota announced Paul von Ebers as President and Chief Executive Officer. CIGNA Corporation named Mary T. Hoeltzel as Vice President and Chief Accounting Officer. Harvard Pilgrim’s President and Chief Executive Officer, Charles D. Baker, resigned on July 17th to run for the Republican nomination for the Massachusetts Governor’s Office. Current COO Bruce Bullen was named as interim CEO of the company. Leprechaun LLC announced the appointment of Susan Rawlings as Chief Executive Officer. Molina Healthcare, Inc. announced Don Hairston as President of Molina Healthcare of Texas and David Pollack as President of Molina Healthcare of Florida. The Regence Group appointed Jared Short as President of BlueCross BlueShield of Oregon.
This analysis compares the relative cost advantages of the Blue Cross Blue Shield and Independent / Provider-Sponsored plans and touches on the advantages of scale, organization type and product concentration.
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