Health-Insurance Q3 Data Snapshot: Medical Costs

In our final data-snapshot installment for the third quarter, we'll take a quick look at medical-cost trends among the major health-insurance providers. (Previous Q3 data snapshots include market capitalization and overall membership and membership trends in key segments.) I'd love to be able to report premium trends as well, but most managed-care providers don't break down that information into the relevant detail -- namely, premium increase per member -- with Aetna being a major exception.

The following table reports the medical-loss ratio -- in other words, the costs of paying medical claims divided into premium income -- for the six largest U.S. health insurers, most of whom use a variety of different terms for the same basic concept. All data are for the third quarters in 2008 and 2007, and reflects the loss ratio for each company's commercial health-insurance business.

Medical Cost Trends at Major Health-Insurance Providers

Company	Q3-08 Ratio	Q3-07 Ratio	Change
WellPoint	82.5%	81.8%	+0.7
UnitedHealth Group	81.7%	79.5%	+2.2
Aetna	80.3%	78.6%	+1.7
Humana	83.1%	81.3%	+2.0
Cigna	83.8%	84.3%*	-0.5
Coventry	82.9%	78.8%	+4.1

*Loss ratio for the nine months ended Sept. 30, 2007. Cigna didn't make third-quarter data available in 2007, at least to the best of my knowledge, and as a result I don't really trust this supposed 50 basis-point drop in its cost ratio.

Further reading:

• UnitedHealth Is Still Bleeding Its Most Profitable Members
• Coventry Health Suddenly Looks Like a Target -- If Anyone Is Buying
• Humana Presses Its (Medicare) Advantage
• WellPoint Holds the Line-- For Now
• Cigna's Healthcare Business Melting Down, Out of Sight
• Can Aetna Buck the Health-Insurance Headwinds?