Aetna

With little more than a week to go before the heart of a new auto-insurance law takes effect, the fifth-largest insurer in Pennsylvania agreed yesterday to roll back rates to motorists, state officials said. The Aetna Casualty & Surety Co., which previously notified customers that it would not renew their policies under the new law, consented to comply with that law. In return, the Casey administration agreed to consider a whopping 25 percent rate increase that Aetna had planned to put into effect before the new law was passed in February.

Aetna Inc., the nation's largest health insurance company, yesterday announced that it will spend $1 billion to acquire Prudential HealthCare, adding 6.6 million subscribers to its membership base. The deal, combined with Aetna's billion-dollar purchase of New York Life Insurance Co.'s health-care business earlier this year, would bring the insurer's membership to 22.4 million people nationwide. With the anticipated completion of the Prudential deal in the second quarter of next year, Aetna U.S. Healthcare said it would become a leading insurer in nine states, including Pennsylvania and New Jersey.

Aetna Inc. is getting into the behavioral health insurance business. The region's second-largest health insurer said yesterday that on Dec. 31, 2005, it would end its contract with Magellan Health Services Inc., the company that now provides Aetna subscribers with behavioral health coverage to pay for the evaluation and treatment of mental health problems. Aetna also is buying the assets that Magellan used to service the behavioral health insurance needs of more than 10.5 million Aetna subscribers, including access to a network of psychologists, psychiatrists and other providers.

Aetna Inc. said yesterday it would whack 4,400 jobs from its national workforce, but spare virtually all 3,000 employees in Blue Bell, where it acquired control of U.S. Healthcare Inc. last summer. Aetna's plan to reduce the number of jobs by 13 percent is largely an outgrowth of the $9 billion merger that created the Aetna U.S. Healthcare division. The total after-tax charge against earnings for the reorganization, which also involves Aetna's retirement services, will be $307 million, according to the company.

A rumored takeover of Oxford Health Plans Inc. by Aetna Inc. would make strategic sense, but the timing is problematic, industry analysts said yesterday. Shares of both companies were higher yesterday amid speculation that Aetna will buy Oxford. Aetna shares closed at $76.687, up $3.187, or 4.3 percent, on the New York Stock Exchange. Oxford closed at $17.75, up 25 cents, or 1.4 percent, on the Nasdaq Stock Market. Analysts said Aetna might well opt to focus instead on digesting its July 1996, $8.9 billion acquisition of U.S. Healthcare of Blue Bell.

President Obama had few nice things to say about insurance companies in his speech on health care last night, but leaders of two of this region's largest private insurers - Independence Blue Cross and Aetna Inc. - gave him generally high marks anyway. Joseph Frick, chief executive officer of the Philadelphia-based Blue plan, which has 3.4 million subscribers, said he found the "call to action refreshing" and agrees the country needs change now. "We're closer to reform than we've ever been," he said.

The nation's largest health insurer, a pioneer in covering infertility treatment, will eliminate benefits for advanced infertility procedures such as in-vitro fertilization. In a move that has already outraged infertile couples and their doctors, Aetna US Healthcare said it would take the action nationally because it felt an excessive number of members were attracted to its plans for coverage of the expensive treatment. "We had a significant amount of adverse selection," said Arnold Cohen, a doctor and Aetna's corporate medical director for women's health.

Aetna Inc., the parent of Aetna U.S. Healthcare in Blue Bell, said yesterday that higher medical costs drove profits down 14 percent in the third quarter. But the company said it had raised premiums and would pare operations to boost profitability in the coming year. Aetna also said it might take "significant" charges in the fourth quarter to pay for severance to departing employees and other costs of exiting unprofitable markets. Operating profit fell to $158.1 million, or $1.10 a share, in the quarter, down from $184.

Aetna U.S. Healthcare is cutting commissions by 20 percent to 50 percent to independent brokers who sell its health insurance to employers, an action that raises the prospect that the company and its competitors may soon bypass agents altogether and enroll most members directly over the Internet. Aetna considers brokers to be integral to its business, but the Blue Bell insurer is cutting administrative expenses because of the growing convenience of the Internet, company president Michael J. Cardillo said in a speech late last month to 175 brokers and others at American College, a school for insurance professionals in Bryn Mawr.

One was an old-line, process-driven property and casualty insurance company with an established name, and a corporate history so deep that last week it had to apologize for insuring slaves. The other was a go-go entrepreneurial upstart with a fresh strategy based on managed care, a bitten apple for a corporate logo, and a home base in a little-known suburb of Philadelphia. Now, three years after Aetna Inc., the venerable Hartford, Conn., insurer, bought U.S. Healthcare of Blue Bell, the $8.9 billion acquisition seems more like a bite of the forbidden fruit.

Daniel F. McGill Sr., 81, of Rhawnhurst, a retired insurance marketing executive with a sense of humor, died Monday, March 4, of cancer at a relative's home in Horsham Township. For 40 years, Mr. McGill worked for Aetna Inc. in Center City. He led the marketing of the firm's products to independent insurance brokerages in the Philadelphia area and South Jersey. Born in Rhawnhurst, he lived there for most of his life before moving in with a daughter last October when his health failed.

  When patients insured by Independence Blue Cross are discharged from the hospital, discharge reports are added to medical records at their primary doctors' offices less than 50 percent of the time. It's a common example of the gaps in information-sharing among hospitals, doctors, and others in the health-care system. "A physician caring for a patient is sometimes not aware of all of the care that's been provided, not aware of all the medications the patient is taking, or aware of the lab tests that have been done, or of the results of those tests," said Richard Snyder, chief medical officer at Independence Blue Cross.

IN THE REGION Safeguard raises 2012 guidance Wayne-based holding company Safeguard Scientifics Inc. raised 2012 revenue guidance, saying aggregate revenue for its partner companies will be in the range of $185 million to $190 million. That compared with initial 2012 guidance of $160 million to $165 million. "Steady growth and expansion at our partner companies, despite the fragile state of the macro-economy, continues to validate Safeguard's strategic focus," Peter J. Boni, president and chief executive, said in a statement.

For the third time in 15 years, Claudia B. Timbo has started a new call center up in Blue Bell. This time, she's calling it CompanyVoice , and leasing a floor of a vacant Aetna Inc. building on Harvest Drive - enough space for 125 people - with options to take the three other floors as business grows. Timbo says her new clients include law firm Linebarger Goggan Blair & Sampson L.L.P. , which handles homeowner tax claims for the City of Philadelphia , Continental Bank , and trucking companies seeking sales leads.

  Aetna Inc., a major health insurer in the Philadelphia region, has agreed to pay $5.7 billion to buy competitor Coventry Healthcare Inc. in a bid to expand its Medicaid business and other operations before major provisions of the Affordable Care Act take effect, the companies said Monday. In 2014, many states are expected to expand Medicaid to cover a significant portion of the currently uninsured, increasing business opportunities for companies that run those programs for states.

Several of the nation's largest health insurers drew attention last week by saying they would maintain certain popular consumer provisions in the 2010 health reform law even if the Supreme Court strikes down the statute in a ruling expected this month. Humana Inc., Aetna Inc., and UnitedHealth Group Inc. said they would continue offering preventive health services, such as immunizations with no direct out-of-pocket costs for consumers, allow children to stay on their parents' plans until they turn 26, and keep the third-party appeals process for denials of coverage mandated by the 2010 Patient Protection and Affordable Care Act. But a local employee benefits expert said the insurers' announcements were probably not as significant as they first appeared to be. "I think it was really just a PR move," said Joseph McGinty, vice president of employee benefits consulting at the Graham Co., a Philadelphia employee benefits and insurance firm.

In­de­pend­ence Blue Cross, the largest health in­sur­er in the Philadelphia re­gion, said Tues­day that its 2011 net in­come soared 49 percent, to $314.8 mil­lion. The com­pa­ny's prof­it mar­gin of 3.4 per­cent was its biggest in at least 10 years. "I'm proud of the pro­gress we've made," said IBC's president and chief ex­ec­u­tive of­fi­cer, Dan­iel J. Hilferty. The in­sur­er has rebounded from two years of losses, in 2008 and 2009. Glen Philips, an IBC customer, said it bothered him to hear of IBC's strong profits, given the heavy cost of buying insurance for 40-plus employees at Philips Bros.

Independence Blue Cross, the biggest health insurer in the Philadelphia region, added 45,020 members last year, the first growth since 2008 for the Center City nonprofit, which serves nearly 3.1 million people. IBC has yet to release comprehensive financial results for 2011, but president and chief executive Daniel J. Hilferty said the company continued its recovery from losses in 2008 and 2009 and expected to report an improvement over 2010, when it had a profit margin of 2.2 percent.