WellPoint, Inc. (WLP), CIGNA Corporation (CI), Aetna Inc (AET): 5 Myths About Those Despicable Health Insurers

Humana pays its claims the quickest of the bunch, with a median first remittance response time of six days. WellPoint, Inc. (NYSE:WLP)’s Anthem and CIGNA Corporation (NYSE:CI) aren’t far behind with a median of seven days. UnitedHealth waits a median of 11 days for payment. Aetna Inc (NYSE:AET) brings up the rear with a median remittance time of 14 days.

None of these response times are bad. What’s more, all of these companies pay more than 98% of claim dollars within 30 days. That’s not a picture of clinching money to keep it from going out the door.

Myth No. 5: Health insurers mess up payments frequently.
What about accuracy? Surely these big bureaucracies mess up claims by the droves. Nope — at least, not for the most part.

Anthem has the worst record of the five, with an accuracy rate for first electronic remittance advice, or ERA, of 90.77%. An error rate of nearly one in 10 isn’t too great. However, the other insurers fared much better.

Aetna Inc (NYSE:AET), CIGNA Corporation (NYSE:CI), and Humana all boast accuracy rates of more than 96%. UnitedHealth claims the best record, with a first ERA accuracy rate of 97.52%. All of them also achieved tremendous improvement of accuracy over the past few years.

Good guys?
Not only are these five health insurers not super-villains when it comes to paying up for insurance claims, several of them have delivered really good returns for investors. Take a look at how these market minions have performed over the past year.

AET Total Return Price data by YCharts.

Humana is the worst, bringing in a total return of a little less than 12%. The others did much better, though, with Aetna Inc (NYSE:AET) and CIGNA Corporation (NYSE:CI) hauling in 70% returns in a year. Would you like more of your stocks to have performance so “despicable”? Me too.

The article 5 Myths About Those Despicable Health Insurers originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group and WellPoint. The Motley Fool owns shares of WellPoint.

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