Aetna Health Insurance will double Revenues to $100 billion by 2020 thanks to Obamacare

[ErikJ]

Source: CNBC

CNBC News Alert: Aetna CEO Bertolini says it will double its revenue to $100 billion by 2020. Bertolini thinks that's a conservative estimate. Due to a combination of factors including Medicare Advanatage, Medicare (Medicaid?) expansion, and private exchanges which he thinks will host more than 75 million by 2020. He also doesnt expect Obamacare to go away and that mid-term elections will only result in changes and improvements of Obamacare.




Read more: http://www.theflyonthewall.com/permalinks/entry.php/AETid1933092/AET-Aetna-targets-longterm-operating-revenue-of-more-than-B-by-

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This from Fly on the Wall financial news, the only thing I could find on the internet about Bertolini's statement.
December 12, 2013
09:42 EDT AET Aetna targets long-term operating revenue of more than $100B by 2020
Aetna expects retail marketplaces can be the primary vehicle for insurance, and that retail commercial exchange enrollment could exceed 75M by 2020. Approximately 50% of health care dollars could be paid through value-based payment models by 2020. The company's exposure to the individual business is not expected to change materially in 2014. Aetna said it expected to re-enter a period of normal growth following years of ACA pressures by 2016. It targets operating revenue of more than $100B in 2020, as well as double digit operating EPS growth over time. Comments taken from 2013 Investor Conference.
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It seems the CNBC News Alert had 2 errors. They said on air that Aetna revenues would increase to $100 million and they said Medicare expansion when I believe he probably said or meant Medicaid expansion.

[Comrade Grumpy]

1. Fucking parasites. Abolish insurance companies; institute national health care. That is all.

[OnyxCollie]

2. Things are working out nicely for them.

All according to plan.

[Autumn]

3. Just imagine an infusion of 100 billion dollars going into

Medicare and Medicaid from people buying into that instead of paying insurance companies.

[Hassin Bin Sober]

24. Yep, its a nice racket they have.

Collect premiums for a person's entire life and then pawn them off on Medicare when they really need insurance.

Feeding a couple hundred billion in premiums from healthy people would change the whole landscape of Medicare.

[YOHABLO]

4. Because a single payer national health care program was ''off the table'' thanks Obama

[uppityperson]

5. Isn't there a part in Obamacare where they can only net a certain percentage?

[frazzled]

7. Yes, and it also rescinds payments to Medicare Advantage plans

So Aetna's profits are actually limited by the law ... which means they're only saying (I guess) that they will be getting more customers. Not surprising.

[Autumn]

9. I would imagine that figure is with the certain percentage allowable

by Obamacare. Damn good profit there.

[Mysterysouppe]

15. 80% of premiums must go for medical costs. But....

the 20% profit comes from a bigger pie created by mandatory customers.

[Jesus Malverde]

6. there is a word for a partnership between the corporations and the government...

I forget the word...

[Wilms]

8. I think the word is, "Faschinable".

Or something like that.

[Jesus Malverde]

10. Yes it is!

[geek tragedy]

14. "partnership between corporations and government"

happens in every single nation, in every single city on the planet.

Medicare is administered by private insurance companies. Try flying into an airport that isn't a partnership between giant corporations and government.

[Jesus Malverde]

17. Most airports are owned by the state.

Airlines pay the privilege to use them.

They are not built by the government, who then let the airlines use them for free and then force every American to fly once a month.

And no... these "guarantee the profits of private businesses" do not happen "in every single nation". It's often a characteristic of a weak central government.

[geek tragedy]

18. Anyone who flies on an airliner flies on a private/public partnership.

Virtually every airliner body and every airliner engine is built by the US and European Military Industrial Complex (Boeing, Airbus, General Electric, Rolls Royce, Pratt & Whitney).

There are upwards limitations on insurance company profitability, but no floors in the ACA. No insurance company is guaranteed any profit. They have to compete against one another. If they don't draw enough customers and efficiently run their business, they'll go broke.

[former9thward]

27. Actually, no.

Profit will be protected. Section 1343 of the Affordable Care Act provides for a
"permanent risk adjustment program." The insurance companies will get subsidies.


Provides payments to health insurance issuers that
disproportionately attract higher-risk populations (such as
individuals with chronic conditions)
• Transfers funds from plans with relatively lower risk
enrollees to plans with relatively higher risk enrollees to
protect against adverse selection

http://www.cms.gov/cciio/resources/files/downloads/3rs-final-rule.pdf

[geek tragedy]

29. That is to prevent insurance companies from cherry picking healthy people

in order to stick their competitors with the much more expensive old and sick people.

[former9thward]

31. It protects profits.

Something you said the ACA did not do.

[geek tragedy]

32. Do you understand what adverse selection is? nt

[former9thward]

33. Yes.

[geek tragedy]

34. So you understand that the provision you cite doesn't guarantee profitability

but rather removes the incentive for insurance companies to find a way to turn away the sick and elderly.

[former9thward]

35. It does guarantee profits.

It gives subsidies to insurance companies whose profitability is threatened. You were wrong. The preexisting section prevents them from turning away the sick. Nice try at deflecting.

[geek tragedy]

36. No, it doesn't guarantee profits it all. It guarantees they won't lose money

because they insure sick and elderly.

If they run a shitty, inefficient business, can't bargain down costs with providers, etc they can still lose money.

[Mysterysouppe]

11. This is the PURPOSE of Obamacare.

It's a subsidy for Aetna and the other big insurance companies. But doesn't Aetna whine about Obamacare? Yes, all the way to the bank.

[dvncmdy]

12. Capitalism

The GOP will never admit they LOVE the A.C.A.

[jamzrockz]

16. This is the way politics is America

If the republicans had proposed this exact same law, the democrats would have rejected it. But it just happened to be that the democrats proposed this very capitalistic bill and the republicans by default rejected it. And the voters in both camps act accordingly.

[dvncmdy]

19. Good point

.....yeah, true

[geek tragedy]

13. "Aetna said it expected to re-enter a period of normal growth following years of ACA pressures"

In other words, they expect to lose money because of the ACA over the next few years.

[Mysterysouppe]

22. Aetna is always whining--all the way to the bank.

[phleshdef]

20. Revenue isn't profit. And these pools NEED that kind of money in them...

...in order to cover pre-existing conditions without limits and better "max out of pocket" limitations. That was the point of this whole thing. Grow the revenues by increasing the size of the pool so that risks can be shared broadly enough that everyone is able to get covered.

[Mysterysouppe]

21. Aetna's 20% profit goes to Wall Street, not back into "the pool."

[phleshdef]

23. And you point is?

No one ever said the profit went back into the pool. Regardless, the more revenue, the bigger the pool is. And they have to spend 80-85% of it on care or send people refunds. No one ever said they weren't still going to make money off of it. You are presenting a false argument.

[Mysterysouppe]

25. Why don't you go post on FR....

...if you love the profit system so much?

[Hoyt]

28. Let's be fair, the 15/20% is not all profits, and at least initially they are taking on big risks.

Once things become settled in, it's pretty easy to ratchet the overhead percentage down. Let them use up their money on systems, claims management, utilization controls, quality initiatives, etc.

[phleshdef]

30. Get off it. I'd prefer a single public program.

But we can't have that right now because the legislative will isn't there. In the meantime, I want to see the ACA be as successful as it can be and the key to that is having the insurance pools respecting everything that was passed in the Patients Bill of Rights and being able to pay for it.

[Vox Moi]

26. Shows how powerful the Insurance companies are.

… The knew that Obamacare would represent a huge windfall since the uninsured tend to be younger and healthier.
The 'subsidy' given to consumers is really a price support mechanism for the insurance companies.
They fought tooth and nail and won exactly what they were looking for: millions of new customers.
The ACA did a lot to make sure that the insurance companies will be in business for a long time.