Medicare introduced the Medicare Part D prescription drug benefit in January 2006 to cover expenses of prescription drugs purchased at retail and mail-order pharmacies.
Aetna derives 38% of its operating revenues from its government-sponsored business, which involves offerings such as Medicare Advantage.
Reforms in the individual insurance segment have created an opportunity for the private health insurance industry (XLV) to attract new enrollments.
Aetna (AET) derives 58% of its operating revenues from its commercial business, which involves offerings such as fully insured health plans and self-insured health plans.
Aetna’s membership is mainly concentrated in the western US, followed by the Southeast, the Northeast, the Mid-US, and finally consolidated international enrollments.
Out of Aetna’s (AET) three business segments, Health Care accounted for 95% of the company’s revenue.
Investors generally use a forward price-to-earnings (or PE) ratio to compare valuations and determine the best-performing private health insurance company.
The NAIC, a US standard setting and regulatory support organization, has imposed capital requirements on the insurance business called RBC requirements.
Aetna’s recoverables and payables from the premium stabilization program amounted to $338 and $230 million, respectively.
Aetna faces a unique combination of business risks, in addition to industry-specific key risks.
Aetna’s M&A strategy is mainly targeted at expanding the company’s markets and building its technology capabilities.
Aetna creates value for its shareholders by distributing dividends, repurchasing shares, and focusing on both organic and inorganic growth.
The medical care ratio of health insurance companies is calculated as the ratio of the total money spent in health care claims to premiums earned.
Aetna has adopted a strategy involving a combination of value-based payments and effective health technologies to transform its provider network.
With a market capitalization of $35.1 billion, Aetna (AET) is one of the largest insurance providers in the US.
As of January 2015, Johnson & Johnson’s ownership structure is dominated by passive investments. They account for more than 80% of the total ownership structure.
Estimates suggest that Johnson & Johnson’s forward PE ratio increased from 15.5x in 2014 to 16.1x in 2015. The PE ratio is hovering around 19x for the industry.
Johnson & Johnson (JNJ) faces a unique combination of risks. The risks are in addition to specific risks in the pharmaceutical industry.
Johnson & Johnson (JNJ) is working on various organic and inorganic growth strategies in order to maintain its position as a leading pharmaceutical company worldwide.
For a big pharma company like Johnson & Johnson (JNJ), research and development plays a vital role in maintaining a healthy revenue stream.