A.M. Best Special Report: Moderating Costs Favorably Impact Health Insurers' Earnings.OLDWICK, N.J. -- Lower-than-anticipated increases in health-care costs contributed very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to third-quarter earnings reported by most of the managed-care companies featured in a special report released by A.M. Best Co. On average, net income increased approximately 40%, driven by significant improvement in Cigna Corp.'s earnings; Aetna Inc.'s progress subsequent to the completion of its financial and strategic turnaround; and overall continued strong earnings performance by UnitedHealth Group UnitedHealth Group Incorporated NYSE: UNH is a managed health care company. It is the parent of United Healthcare, one of the largest health insurers in the U.S. It was created in 1977, as UnitedHealthCare Corporation (it renamed itself in 1998), but traces its origin to a Inc., as well as WellPoint Health Systems Inc. and Anthem anthem [ultimately from antiphon], short nonliturgical choral composition used in Protestant services, usually accompanied and having an English text. The term is used in a broader sense for "national anthems" and for the Latin motets still used occasionally in Inc. For the second year in a row, health-care costs have moderated. Among the top 15 public managed-care companies, health-care expenses increased by 6.4% from September 30, 2003, to September 30, 2004, when adjusted for the acquisitions of Mid Atlantic Mid Atlantic can mean:
MAMSI Middle-Aged Men's Snowboarding Initiative (Minnesota) ) and Oxford Health Plans Inc. by UnitedHealth Group Inc. in 2004. Comparably, health-care expenses increased 7.8% between September 30, 2002, and September 30, 2003. Although health-care costs appear to be stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. , premium yields are decelerating. Premium yields still are increasing, but by less than the underlying cost trends. The effect of several years of significant benefit buy-downs as a means of manipulating premium increases most likely has been fully exhausted. What remains is that net medical trends should be higher in the absence of a meaningful decline in underlying cost trends, thus causing a negative spread. While companies' health-care cost percentage increases have remained in the low teens during the past two years, overall health-care costs continue to outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, U.S. economic growth. The Federal Reserve released its latest nationwide economic survey highlighting that economic growth in the third quarter of 2004 was 7.2%, and noted it to be the strongest in two decades. BestWeek subscribers can download a PDF (Portable Document Format) The de facto standard for document publishing from Adobe. On the Web, there are countless brochures, data sheets, white papers and technical manuals in the PDF format. copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at http://www.bestweek.com. Nonsubscribers can download a PDF copy of the full special report (12 pages) for $50 or a combination of the PDF copy plus the spreadsheet file of the report data for $100 from our Web site at http://www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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