Aetna 10-Q 29 Oct 09 2009 Q3 Quarterly report Financial data

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 30, 2009		3 Months Ended Sep. 30, 2008		9 Months Ended Sep. 30, 2009		9 Months Ended Sep. 30, 2008
Revenue:
Health care premiums	7092.8		6450.8		21115.5		18993.2
Other premiums	471.4		466.7		1432.4		1415.2
Fees and other revenue (1)	876.8	[1]	834.1	[1]	2662.2	[1]	2488.7	[1]
Net investment income	263.4		229.8		771.4		731.7
Net realized capital gains (losses)	18		-356.8		26.4		-437.4
Total revenue	8722.4		7624.6		26007.9		23191.4
Benefits and expenses:
Health care costs (2)	6069.6	[2]	5216.6	[2]	17976.2	[2]	15456.1	[2]
Current and future benefits	514.5		464.7		1521.6		1474.4
Operating Expenses
Selling expenses	312.2		282.2		938.5		861.6
General and administrative expenses	1263.3		1152.5		3653.3		3,372
Total operating expenses	1575.5		1434.7		4591.8		4233.6
Interest expense	60.6		60.5		182.8		171.5
Amortization of other acquired intangible assets	23.9		25.4		72.9		80.5
Reduction of reserve for anticipated future losses on discontinued products	0		0		0		-43.8
Total benefits and expenses	8244.1		7201.9		24345.3		21372.3
Income Before Income Taxes	478.3		422.7		1662.6		1819.1
Income taxes:
Current	203		197.9		579		685.8
Deferred	-50.9		-52.5		(27)		-56.1
Total income taxes	152.1		145.4		552		629.7
Net income	326.2		277.3		1110.6		1189.4
Earnings per common share:
Basic	0.75		0.59		2.5		2.47
Diluted	0.73		0.58		2.46		2.4
[1]Fees and other revenue include administrative services contract member co-payments and plan sponsor reimbursements related to our mail order and specialty pharmacy operations of $27.4 million and $64.5 million (net of pharmaceutical and processing costs of $401.8 million and $1.2 billion) for the three and nine months ended September 30, 2009, respectively, and $12.8 million and $42.7 million (net of pharmaceutical and processing costs of $403.4 million and $1.2 billion) for the three and nine months ended September 30, 2008, respectively.
[2]Health care costs have been reduced by Insured member co-payment revenue related to our mail order and specialty pharmacy operations of $31.0 million and $91.0 million for the three and nine months ended September 30, 2009, respectively, and $27.5 million and $83.9 million for the three and nine months ended September 30, 2008, respectively.

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	9 Months Ended Sep. 30, 2009	12 Months Ended Dec. 31, 2008
Current assets:
Cash and cash equivalents	1830.1	1179.5
Investments	2125.7	706
Premiums receivable, net	687.9	616.4
Other receivables, net	679.2	554.3
Accrued investment income	202.8	193.6
Collateral received under securities loan agreements	468.2	749.6
Income taxes receivable	121.6	164.9
Deferred income taxes	439.4	301.5
Other current assets	545.5	452.6
Total current assets	7100.4	4918.4
Long-term investments	16844.1	16163.4
Reinsurance recoverables	991.3	1010.3
Goodwill	5089.4	5085.6
Other acquired intangible assets, net	594.5	667.4
Property and equipment, net	532.6	467.5
Deferred income taxes	150.2	778.7
Other long-term assets	782.1	841.3
Separate Accounts assets	6050.4	5919.9
Total assets	38,135	35852.5
Current liabilities:
Health care costs payable	2890.7	2393.2
Future policy benefits	728.8	759.7
Unpaid claims	573.8	559.8
Unearned premiums	292.6	238.6
Policyholders' funds	797.1	754.4
Collateral payable under securities loan agreements	468.2	749.6
Short-term debt	109.8	215.7
Accrued expenses and other current liabilities	2564.2	1883.8
Total current liabilities	8425.2	7554.8
Future policy benefits	6554.2	6765.4
Unpaid claims	1348.3	1271.2
Policyholders' funds	1290.7	1171.7
Long-term debt	3639.2	3638.3
Other long-term liabilities	1,287	1344.8
Separate Accounts liabilities	6050.4	5919.9
Total liabilities	28,595	27666.1
Commitments and contingencies (Note 13)	--	--
Shareholders' equity:
Common stock ($.01 par value; 2.7 billion shares authorized; 433.5 million and 456.3 million shares issued and outstanding in 2009 and 2008, respectively) and additional paid-in capital	456.8	351.2
Retained earnings	10201.8	9716.5
Accumulated other comprehensive loss	-1118.6	-1881.3
Total shareholders' equity	9,540	8186.4
Total liabilities and shareholders' equity	$38,135	35852.5

Parenthetical Data For Consolid

Parenthetical Data For Consolidated Balance Sheets (USD $)
	Sep. 30, 2009	Dec. 31, 2008
Shareholders' equity:
Common Stock, par value	0.01	0.01
Common Stock, shares authorized	2,700,000,000	2,700,000,000
Common Stock, shares issued and outstanding	433,500,000	456,300,000

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (USD $)
In Millions	Common Stock Outstanding [Member]	Common Stock And Additional Paid In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss	Comprehensive Income [Member]	Total
Shares, beginning balance at Dec. 31, 2007	496.3
Beginning balance at Dec. 31, 2007		188.8	$10,138	-288.4	$0	10038.4
Comprehensive income:
Net income			1189.4		1189.4	1189.4
Other comprehensive income (loss) (Note 7):
Net unrealized gains (losses) on securities				-369.7		-369.7
Net foreign currency and derivative gains (losses)				-9.3		-9.3
Pension and OPEB plans				1.5		1.5
Other comprehensive income (losses) (Note 7)				-377.5	-377.5	-377.5
Total comprehensive income					811.9
Common shares issued for benefit plans, including tax benefits		137.5				137.5
Common shares issued for benefit plans, including tax benefits (in shares)	2.4
Repurchases of common shares		-0.4	-1672.4			-1672.8
Repurchases of common shares (in shares)	-37.6
Dividends declared			-18.4			-18.4
Ending balance at Sep. 30, 2008		325.9	9636.6	-665.9	0	9296.6
Shares, ending balance at Sep. 30, 2008	461.1
Other comprehensive income (loss) (Note 7):
Shares, beginning balance at Dec. 31, 2008	456.3
Beginning balance at Dec. 31, 2008		351.2	9716.5	-1881.3	0	8186.4
Cumulative effect of adopting new accounting standard at April 1, 2009 (Note 2)			53.7	-53.7
Comprehensive income:
Net income			1110.6		1110.6	1110.6
Other comprehensive income (loss) (Note 7):
Net unrealized gains (losses) on securities				692		692
Net foreign currency and derivative gains (losses)				20.1		20.1
Pension and OPEB plans				104.3		104.3
Other comprehensive income (losses) (Note 7)				816.4	816.4	816.4
Total comprehensive income					1,927
Common shares issued for benefit plans, including tax benefits		105.9				105.9
Common shares issued for benefit plans, including tax benefits (in shares)	2.4
Repurchases of common shares		-0.3	-661.7			(662)
Repurchases of common shares (in shares)	-25.2
Dividends declared			-17.3			-17.3
Ending balance at Sep. 30, 2009		456.8	10201.8	-1118.6	$0	$9,540
Shares, ending balance at Sep. 30, 2009	433.5

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash Flows From Operating Activities
Net income	1110.6	1189.4
Adjustments to Reconcile Net Income To Net Cash Provided By Operating Activities
Net realized capital (gains) losses	-26.4	437.4
Depreciation and amortization	306.8	279.9
Equity in earnings of affiliates, net	7	65.4
Stock-based compensation expense	81.1	80.2
(Accretion) amortization of net investment (discount) premium	-54.6	(5)
Changes In Assets And Liabilities
Accrued investment income	-9.2	-8.6
Premiums due and other receivables	-157.4	-219.2
Income taxes	20.2	-95.5
Other assets and other liabilities	246.4	-55.2
Health care and insurance liabilities	335	82.7
Other, net	-3.7	0.9
Net cash provided by operating activities	1855.8	1752.4
Cash Flows From Investing Activities
Proceeds from sales and maturities of investments	7714.8	9143.2
Cost of investments	-7934.3	-10195.3
Increase in property, equipment and software	-259.4	-304.6
Cash used for acquisition, net of cash acquired	-6.1	0
Net cash used for investing activities	(485)	-1356.7
Cash Flows From Financing Activities
Proceeds from issuance of long-term debt, net of issuance costs	0	484.8
Net (repayment) issuance of short-term debt	-104.9	352
Deposits and interest credited for investment contracts	4.9	5.9
Withdrawals of investment contracts	-8.1	(8)
Common shares issued under benefit plans	10.4	28.8
Stock-based compensation tax benefits	9.6	23.8
Common shares repurchased	-657.2	-1672.8
Collateral on interest rate swaps	25.1	0
Net cash used for financing activities	-720.2	-785.5
Net increase (decrease) in cash and cash equivalents	650.6	-389.8
Cash and cash equivalents, beginning of period	1179.5	1,254
Cash and cash equivalents, end of period	1830.1	864.2
Supplemental Cash Flow Information
Interest paid	158	137.1
Income taxes paid	522.2	701.8

Organization

Organization
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Organization	1. Organization We conduct our operations in three business segments: Health Care consists of medical, pharmacy benefits management, dental and vision plans offered on both an Insured basis (where we assume all or a majority of the risk for medical and dental care costs) and an employer-funded basis (where the plan sponsor under an administrative services contract (ASC) assumes all or a majority of this risk).Medical products include point-of-service (POS), preferred provider organization (PPO), health maintenance organization (HMO) and indemnity benefit plans.Medical products also include health savings accounts (HSAs) and Aetna HealthFund, consumer-directed health plans that combine traditional POS or PPO and/or dental coverage, subject to a deductible, with an accumulating benefit account (which may be funded by the plan sponsor and/or the member in the case of HSAs).We also offer Medicare and Medicaid products and services and specialty products, such as medical management and data analytics services, behavioral health plans and stop loss insurance, as well as products that provide access to our provider network in select markets. Group Insurance primarily includes group life insurance products offered on an Insured basis, including basic and supplemental group term life, group universal life, supplemental or voluntary programs and accidental death and dismemberment coverage.Group Insurance also includes (i) group disability products offered to employers on both an Insured and an ASC basis which consist primarily of short-term and long-term disability insurance, (ii) absence management services offered to employers, which include short-term and long-term disability administration and leave management, and (iii) long-term care products that were offered primarily on an Insured basis, which provide benefits covering the cost of care in private home settings, adult day care, assisted living or nursing facilities.We no longer solicit or accept new long-term care customers, and we are working with our customers on an orderly transition of this product to other carriers. Large Case Pensions manages a variety of retirement products (including pension and annuity products) primarily for tax qualified pension plans.These products provide a variety of funding and benefit payment distribution options and other services.Large Case Pensions also includes certain discontinued products (refer to Note 15 beginning on page 23 for additional information).

Summary of Significant Accounti

Summary of Significant Accounting Policies
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Summary Of Significant Accounting Policies	2. Summary of Significant Accounting Policies Interim Financial Statements These interim financial statements necessarily rely on estimates, including assumptions as to annualized tax rates.In the opinion of management, all adjustments necessary for a fair statement of results for the interim periods have been made.All such adjustments are of a normal, recurring nature.The accompanying unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes presented in our 2008 Annual Report on Form 10-K (our 2008 Annual Report).Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), but that is not required for interim reporting purposes, has been condensed or omitted.We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2008 Annual Report, unless the information contained in those disclosures materially changed or is required by GAAP.Subsequent events, if any, are evaluated through October 29, 2009, the date the financial statements are issued. Principles of Consolidation These unaudited consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Aetna and the subsidiaries that we control.All significant intercompany balances have been eliminated in consolidation. New Accounting Standards Non-controlling Interests On January 1, 2009, we adopted new accounting guidance issued by the Financial Accounting Standards Board (the FASB) which establishes accounting and reporting standards for the non-controlling interest in a subsidiary (often otherwise referred to as minority interests) and for deconsolidation of the subsidiary.We do not have material non-controlling interests, and therefore, the adoption of this accounting guidance did not impact our financial position or results of operations.Refer to Note 6 beginning on page 7 for additional information. Recognition and Presentation of Other-Than-Temporary Impairments Effective April 1, 2009, we adopted new accounting guidance issued by the FASB for other-than-temporary impairments (OTTI) of debt securities.This guidance establishes new criteria for the recognition of OTTI on debt securities and also requires additional financial statement disclosure.The new criteria requires OTTI to be recognized if either a credit-related loss is deemed to have occurred or we have the intention to sell a security that is in an unrealized loss position.Refer to Notes 6 and 7 beginning on pages 7 and 13, respectively. Upon adoption of this new guidance, we evaluated securities held at April 1, 2009 for which a previous OTTI was recognized, and identified those securities that we did not intend to sell.As a result of this analysis, we recorded a $54 million ($83 million pretax) cumulative effect adjustment that increased retained earnings and accumulated other comprehensive loss as of April 1, 2009. Fair Value Measurements Assessing Fair Value in Market Conditions That Are Not Orderly In

Acquisition

Acquisition
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Pending Acquisition	3. Pending Acquisition On July 31, 2009, we announced an agreement to acquire Horizon Behavioral Services, LLC, a leading provider of employee assistance programs, for approximately $70 million, which we expect to finance with available resources.We expect to close this transaction after satisfaction of customary closing conditions, including receipt ofregulatory approvals.

Earnings Per Common Share

Earnings Per Common Share
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Earnings Per Share	4. Earnings Per Common Share Basic earnings per share (EPS) is computed by dividing income available to common shareholders (i.e., the numerator) by the weighted average number of common shares outstanding (i.e., the denominator) during the reporting period.Diluted EPS is computed in a similar manner, except that the weighted average number of common shares outstanding is adjusted for the dilutive effects of stock options and stock appreciation rights (SARs), but only in the quarters in which such effect is dilutive. The computations of basic and diluted EPS for the three and nine months ended September 30, 2009 and 2008 are as follows: Three Months Ended September 30, Nine Months Ended September 30, (Millions, except per common share data) 2009 2008 2009 2008 Net income $ 326.2 $ 277.3 $ 1,110.6 $ 1,189.4 Weighted average shares used to compute basic EPS 436.0 468.0 443.8 480.9 Dilutive effect of outstanding stock-based compensation awards (1) 8.6 12.3 8.4 14.1 Weighted average shares used to compute diluted EPS 444.6 480.3 452.2 495.0 Basic EPS $ .75 $ .59 $ 2.50 $ 2.47 Diluted EPS $ .73 $ .58 $ 2.46 $ 2.40 (1) Approximately 19.2 and 19.3 million SARs (with exercise prices ranging from $25.94 to $59.76) and 6.2 million stock options (with exercise prices ranging from $33.38 to $42.35) were not included in the calculation of diluted EPS for the three and nine months ended September 30, 2009 and approximately 14.4 million and 8.2 million SARs (with exercise prices ranging from $40.24 to $59.76 for each period) were not included in the calculation of diluted EPS for the three and nine months ended September 30, 2008, respectively, as their exercise prices were greater than the average market price of Aetna common shares during such periods.

Operating Expenses

Operating Expenses
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Operating Expense	5. Operating Expenses For the three and nine months ended September 30, 2009 and 2008, selling expenses (which include broker commissions, the variable component of our internal sales force compensation and premium taxes) and general and administrative expenses were as follows: Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2009 2008 2009 2008 Selling expenses $ 312.2 $ 282.2 $ 938.5 $ 861.6 General and administrative expenses: Salaries and related benefits 755.8 660.1 2,209.3 1,934.6 Other general and administrative expenses (1) 507.5 492.4 1,444.0 1,437.4 Total general and administrative expenses 1,263.3 1,152.5 3,653.3 3,372.0 Total operating expenses $ 1,575.5 $ 1,434.7 $ 4,591.8 $ 4,233.6 (1) Other general and administrative expenses for the nine months ended September 30, 2009 include $38.2 million of insurance proceeds related to certain litigation we settled in 2003.For the three and nine months ended September 30, 2008, other general and administrative expenses include an allowance against our reinsurance recoverable of $42.2 million from Lehman Re Ltd. (Lehman Re), a subsidiary of Lehman Brothers Holdings Inc.

Investments

Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Investments	6. Investments Total investments at September 30, 2009 and December 31, 2008 were as follows: September 30, 2009 December 31, 2008 (Millions) Current Long-term Total Current Long-term Total Debt and equity securities available for sale $ 2,030.9 $ 14,129.8 $ 16,160.7 $ 633.8 $ 13,359.5 $ 13,993.3 Mortgage loans 91.9 1,511.5 1,603.4 70.4 1,609.5 1,679.9 Other investments 2.9 1,202.8 1,205.7 1.8 1,194.4 1,196.2 Total investments $ 2,125.7 $ 16,844.1 $ 18,969.8 $ 706.0 $ 16,163.4 $ 16,869.4 Debt and Equity Securities Debt and equity securities available for sale at September 30, 2009 and December 31, 2008 were as follows: Gross Gross Amortized Unrealized Unrealized Fair (Millions) Cost Gains Losses Value September 30, 2009 U.S. government securities $ 1,358.0 $ 70.1 $ .7 $ 1,427.4 States, municipalities and political subdivisions 1,989.6 123.2 14.4 2,098.4 U.S. corporate securities 6,332.8 569.3 68.4 6,833.7 Foreign securities 2,478.8 250.4 23.4 2,705.8 Residential mortgage-backed securities 1,238.7 56.7 .3 (1) 1,295.1 Commercial mortgage-backed securities 1,104.2 39.9 125.7 (1) 1,018.4 Other asset-backed securities 397.2 25.5 9.5 (1) 413.2 Redeemable preferred securities 357.0 21.9 46.8 332.1 Total debt securities 15,256.3 1,157.0 289.2 16,124.1 Equity securities 35.3 4.0 2.7 36.6 Total debt and equity securities (2) $ 15,291.6 $ 1,161.0 $ 291.9 $ 16,160.7 December 31, 2008 Debt securities: U.S. government securities $ 890.7 $ 115.3 $ .4 $ 1,005.6 States, municipalities and political subdivisions 1,942.8 23.3 72.5 1,893.6 U.S. corporate securities 6,343.8 228.2 416.5 6,155.5 Foreign securities 2,134.0 103.0 124.9 2,112.1 Residential mortgage-backed securities 1,210.2 39.3 .4 1,249.1 Commercial mortgage-backed securities 1,086.4 15.3 239.3 862.4 Other asset-backed securities 441.3 1.5 59.3 383.5 Redeemable preferred securities 400.4 6.6 107.0 300.0 Total debt securities 14,449.6 532.5 1,020.3 13,961.8 Equity securities 43.4 .2 12.1 31.5 Total debt and equity securities (2) $ 14,493.0 $ 532.7 $ 1,032.4 $ 13,993.3 (1) When we record a credit-related OTTI on a security, we recognize a loss in earnings equal to the difference between the securitys amortized cost and the present value of its cash flows.If we do not intend to sell the secur

Other Comprehensive

Other Comprehensive (Loss) Income
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Other Comprehensive Income	7. Other Comprehensive (Loss) Income Shareholders equity included the following activity in accumulated other comprehensive loss (excluding amounts related to experience-rated contract holders and discontinued products) for the nine months ended September 30, 2009 and 2008: Net Unrealized Gains (Losses) Pension and OPEB Plans Securities Foreign Currency and Derivatives Unrecognized Net Actuarial Losses Unrecognized Prior Service Cost (Millions) Previously Impaired (1) All Other Total Accumulated Other Comprehensive Loss Nine Months Ended September 30, 2009 Balance at January 1, 2009 $ - $ (229.3 ) $ (8.7 ) $ (1,686.6 ) $ 43.3 $ (1,881.3 ) Cumulative effect of adopting a new accounting standard at April 1, 2009 ($83.0 pretax) (2) (5.3 ) (48.4 ) - - - (53.7 ) Unrealized net gains (losses) arising during the period ($1,181.4 pretax) 128.2 622.7 17.0 - - 767.9 Reclassification to earnings ($85.6 pretax) (4.9 ) (54.0 ) 3.1 107.1 (2.8 ) 48.5 Other comprehensive income (loss) 118.0 520.3 20.1 107.1 (2.8 ) 762.7 Balance at September 30, 2009 $ 118.0 $ 291.0 $ 11.4 $ (1,579.5 ) $ 40.5 $ (1,118.6 ) (1) Represents the non-credit-related component of OTTI on debt securities that we do not intend to sell as well as subsequent changes in fair value related to previously impaired debt securities. (2) EffectiveApril 1,2009, we adopted a new accounting guidance for other-than-temporary impairments of debt securities. Refer to Note 2 beginning onpage 5 for additional information on the cumulative effect adjustment required. Net Unrealized Gains (Losses) Pension and OPEB Plans (Millions) Securities Foreign Currency and Derivatives Unrecognized Net Actuarial Losses Unrecognized Prior Service Cost Total Accumulated Other Comprehensive Loss Nine months ended September 30, 2008 Balance at January 1, 2008 $ 53.3 $ 7.0 $ (395.8 ) $ 47.1 $ (288.4 ) Unrealized net losses ($(1,164.2) pretax) (645.5 ) (15.0 ) - - (660.5 ) Reclassification to earnings ($435.4 pretax) 275.8 5.7 4.3 (2.8 ) 283.0 Other comprehensive (loss) income (369.7 ) (9.3 ) 4.3 (2.8 ) (377.5 ) Balance at September 30, 2008 $ (316.4 ) $ (2.3 ) $ (391.5 ) $ 44.3 $ (665.9 )

Employee Benefit Plans

Employee Benefit Plans
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Employee Benefit Plan	8. Defined Benefit Retirement Plans Components of the net periodic benefit cost (income) of our noncontributory defined benefit pension plans and other postretirement benefit (OPEB) plans for the three and nine months ended September 30, 2009 and 2008 were as follows: Pension Plans OPEB Plans Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Millions) 2009 2008 2009 2008 2009 2008 2009 2008 Service cost $ 12.0 $ 10.8 $ 36.0 $ 32.4 $ - $ .1 $ .2 $ .3 Interest cost 79.1 78.0 237.3 234.0 5.4 5.0 16.2 15.0 Expected return on plan assets (79.8 ) (121.1 ) (239.1 ) (363.1 ) (1.0 ) (1.0 ) (3.0 ) (3.0 ) Amortization of prior service cost (.4 ) (.5 ) (1.5 ) (1.7 ) (.9 ) (.9 ) (2.7 ) (2.7 ) Recognized net actuarial loss 54.1 1.6 162.3 4.8 .8 .6 2.4 1.8 Net periodic benefit cost (income) $ 65.0 $ (31.2 ) $ 195.0 $ (93.6 ) $ 4.3 $ 3.8 $ 13.1 $ 11.4 The increase in pension benefit cost between 2008 and 2009 is primarily attributable to the approximately $1.9 billion decline in the plan assets fair value during 2008.This decline was due to the deteriorating economic conditions experienced during the latter half of 2008.

Debt

Debt
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Debt	9. Debt The carrying value of our long-term debt at September 30, 2009 and December 31, 2008 was as follows: September 30, December 31, (Millions) 2009 2008 Senior notes, 5.75%, due 2011 $ 449.8 $ 449.8 Senior notes, 7.875%, due 2011 449.5 449.2 Senior notes, 6.0%, due 2016 747.0 746.7 Senior notes, 6.5%, due 2018 498.7 498.6 Senior notes, 6.625%, due 2036 798.6 798.6 Senior notes, 6.75%, due 2037 695.6 695.4 Total long-term debt $ 3,639.2 $ 3,638.3 At September 30, 2009 and December 31, 2008, we had approximately $110 million and $216 million, respectively, of commercial paper outstanding with a weighted average interest rate of .31% and 5.36%, respectively. At September 30, 2009, we had an unsecured $1.5 billion revolving credit agreement (the Facility) with several financial institutions which terminates in March 2013.The Facility provides for the issuance of up to $200 million of letters of credit at our request, which count as usage of the available commitments under the Facility.Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the Facility to a maximum of $2.0 billion.Various interest rate options are available under the Facility.Any revolving borrowings mature on the termination date of the Facility.We pay facility fees on the Facility ranging from .045% to .175% per annum, depending upon our long-term senior unsecured debt rating.The facility fee was .06% at September 30, 2009.The Facility contains a financial covenant that requires us to maintain a ratio of total debt to consolidated capitalization as of the end of each fiscal quarter ending on or after December 31, 2007 at or below .5 to 1.0.For this purpose, consolidated capitalization equals the sum of shareholders equity, excluding any overfunded or underfunded status of our pension and OPEB plans and any net unrealized capital gains and losses, and total debt (as defined in the Facility).We met this requirement at September 30, 2009. There were no amounts outstanding under the Facility at September 30, 2009. During the nine months ended September 30, 2009, we entered into four interest rate swaps with a notional value of $100 million each.We entered into these swaps to hedge interest rate exposure in anticipation of future issuance of long-term debt.At September 30, 2009, the interest rate swaps had an aggregate fair value of $23.4 million.We also recorded a $23.4 million gain in other comprehensive income for the nine months ended September 30, 2009.

Capital Stock

Capital Stock
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Capital Stock	10. Capital Stock On June 27, 2008 and February 27, 2009, our Board of Directors (the Board) authorized two share repurchase programs each for the repurchase of up to $750 million of our common stock.During the nine months ended September 30, 2009, we repurchased approximately 25 million shares of common stock at a cost of approximately $662 million (approximately $5 million of these repurchases were settled in early October).At September 30, 2009, we had remaining authorization to repurchase an aggregate of up to approximately $702 million of common stock under the February 27, 2009 Board authorization. On February 13, 2009, approximately 5.2 million SARs, .5 million restricted stock units (RSUs) and .7 million performance stock units (PSUs) were granted to certain employees.If exercised by the employee, the SARs will be settled in common stock, net of taxes, based on the appreciation of our common stock price over $32.11 per share.The number of vested PSUs (which could range from zero to 200% of the original number of units granted) is dependent upon the degree to which we achieve performance goals during the performance period as determined by the Boards Committee on Compensation and Organization.For each vested RSU and PSU, employees receive one share of common stock, net of taxes, at the end of the vesting period.The SARs and RSUs will become 100% vested three years from the grant date, with one-third of the SARs and RSUs vesting each year.The performance period for the PSUs ends on December 31, 2010. On September 25, 2009, our Board declared an annual cash dividend of $.04 per common share payable to shareholders of record at the close of business on November 13, 2009. The dividend will be paid on November 30, 2009.

Dividend Restrictions and Statu

Dividend Restrictions and Statutory Surplus
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Dividend Restrictions	11. Dividend Restrictions and Statutory Surplus Under regulatory requirements at September 30, 2009, the amount of dividends that may be paid to Aetna through the end of 2009 by our insurance and HMO subsidiaries without prior approval by regulatory authorities is approximately $1.3 billion in the aggregate.There are no such restrictions on distributions from Aetna to its shareholders. The combined statutory capital and surplus of our insurance and HMO subsidiaries was $6.3 billion and $5.7 billion at September 30, 2009 and December 31, 2008, respectively.

Financial Instruments

Financial Instruments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Financial Instruments	12. Financial Instruments The preparation of our consolidated financial statements in accordance with GAAP requires certain of our assets and liabilities to be reflected at their fair value, and others on other bases, such as an adjusted historical cost basis.In this note, we provide details on the fair values of financial assets and liabilities and how we determine those fair values.We present this information for those instruments that are reported at fair value for which the change in fair value impacts net income or other comprehensive income separately from other financial assets and liabilities. Financial Instruments Measured at Fair Value in our Balance Sheets Certain of the financial instruments we own are measured at fair value in our balance sheet.The fair values of these instruments are based on valuations that include inputs that can be classified within one of three levels of a hierarchy established by GAAP.The following are the levels of the hierarchy and a brief description of the type of valuation information that qualifies a financial asset or liability for each level: o Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets. o Level 2 Inputs other than Level 1 that are based on observable market data.These include: quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets, inputs that are observable that are not prices (such as interest rates, credit risks, etc.) and inputs that are derived from or corroborated by observable markets. o Level 3 Developed from unobservable data, reflecting our own assumptions. When quoted prices in active markets for identical assets and liabilities are available, we use these quoted market prices to determine the fair value of financial assets and liabilities and classify these assets and liabilities as Level 1.In other cases where a quoted market price for identical assets and liabilities in an active market is either not available or not observable, we estimate fair values using valuation methodologies based on available and observable market information or by using a matrix pricing model.These financial assets and liabilities would then be classified as Level 2.If quoted market prices are not available, we determine fair value using broker quotes or an internal analysis of each investments financial performance and cash flow projections.In these instances, financial assets and liabilities will be classified based upon the lowest level of input that is significant to the valuation. Thus, financial assets and liabilities may be classified in Level 3 even though there may be some significant inputs that may be observable. The following is a description of the valuation methodologies used for our financial assets and liabilities that are measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy. Debt Securities - Where quoted prices are available in an active market, our debt securities are classified in Level 1 of the fair value hierarchy.Our Level 1 debt securities are comprised prima

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Commitment and Contingencies	13. Commitments and Contingencies Litigation and Regulatory Proceedings Out-of-Network Benefit Proceedings We are named as a defendant in several purported class actions and individual lawsuits arising out of our practices related to the payment of claims for services rendered to our members by health care providers with whom we do not have a contract (out-of-network providers).Other major health insurers are also the subject of similar litigation.Among other things, these lawsuits charge that we paid too little to our health plan members and/or providers for these services, among other reasons because of our use of data provided by Ingenix, Inc., a subsidiary of one of our competitors (Ingenix). Various plaintiffs who are health care providers or medical associations seek to represent nationwide classes of out-of-network providers who provided services to our members during the period from 2001 to the present.Various plaintiffs who are members in our health plans seek to represent nationwide classes of our members who received services from out-of-network providers during the period from 2001 to the present. Taken together, these lawsuits allege that we violated state law, the Employee Retirement Income Security Act of 1974, as amended (ERISA), the Racketeer Influenced and Corrupt Organizations Act and federal antitrust laws, either acting alone or in concert with our competitors.The purported classes seek reimbursement of all unpaid benefits, recalculation and repayment of deductible and coinsurance amounts, unspecified damages and treble damages, statutory penalties, injunctive and declaratory relief, plus interest, costs and attorneys fees, and seek to disqualify us from acting as a fiduciary of any benefit plan that is subject to ERISA.Individual lawsuits that generally contain similar allegations and seek similar relief have been brought by a health plan member and an out-of-network provider. The first class action case was commenced on July 30, 2007.The federal Judicial Panel on Multi-District Litigation (the MDL Panel) has consolidated these class action cases in federal district court in New Jersey under the caption In re: Aetna UCR Litigation, MDL No. 2020 (MDL 2020).In addition, the MDL Panel has transferred the individual lawsuits to MDL 2020.We intend to vigorously defend ourselves against the claims brought in these cases, which are in their preliminary stages. On January 15, 2009, Aetna and the New York Attorney General announced an agreement relating to an industry-wide investigation into certain payment practices with respect to out-of-network providers.In October 2009, pursuant to the agreement, we contributed $20 million towards the establishment of an independent database system to provide fee information regarding out-of-network reimbursement rates.When the new database is operational, we will cease using databases owned by Ingenix and will use the new database for a period of at least five years in connection with out-of-network reimbursements in those benefit plans that employ a reasonable and customary standard for out-of-network reimbursements.In February 2009, we agreed with the New York At

Segment Information

Segment Information
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Segment Information	14. Segment Information Our operations are conducted in three business segments:Health Care, Group Insurance and Large Case Pensions.Our Corporate Financing segment is not a business segment.It is added to our business segments in order to reconcile to our consolidated results.The Corporate Financing segment includes interest expense on our outstanding debt and, beginning on January 1, 2009, the financing components of our pension and other post-retirement benefit plan expense (the service cost components of this expense are allocated to our business segments).Prior periods have been reclassified to reflect this change. Summarized financial information of our segments for the three and nine months ended September 30, 2009 and 2008 was as follows: Health Group Large Case Corporate Total (Millions) Care Insurance Pensions Financing Company Three months ended September 30, 2009 Revenue from external customers $ 7,940.4 $ 457.1 $ 43.5 $ - $ 8,441.0 Operating earnings (loss) (1) 345.7 33.3 6.7 (77.5 ) 308.2 Three months ended September 30, 2008 Revenue from external customers $ 7,257.7 $ 448.5 $ 45.4 $ - $ 7,751.6 Operating earnings (loss) (1) 496.8 46.4 8.8 (15.3 ) 536.7 Nine months ended September 30, 2009 Revenue from external customers $ 23,687.3 $ 1,386.5 $ 136.3 $ - $ 25,210.1 Operating earnings (loss) (1) 1,151.1 117.9 23.6 (233.3 ) 1,059.3 Nine months ended September 30, 2008 Revenue from external customers $ 21,399.5 $ 1,335.3 $ 162.3 $ - $ 22,897.1 Operating earnings (loss) (1) 1,366.3 119.1 26.8 (39.6 ) 1,472.6 (1) Operating earnings (loss) excludes net realized capital gains or losses and the other items described in the reconciliation below. A reconciliation of operating earnings to net income for the three and nine months ended September 30, 2009 and 2008 was as follows: Three Months Ended Nine Months Ended September 30, September 30, (Millions) 2009 2008 2009 2008 Operating earnings $ 308.2 $ 536.7 $ 1,059.3 $ 1,472.6 Net realized capital gains (losses) 18.0 (232.0 ) 26.4 (284.3 ) Litigation-related insurance proceeds (1) - - 24.9 - Allowance on reinsurance recoverable (1) - (27.4 ) - (27.4 ) Reduction of reserve for anticipated future losses on discontinued products (1) - - - 28.5 Net income $ 326.2 $ 277.3 $ 1,110.6 $ 1,189.4 (1) The following other items are excluded from operating earnings because we believe they neither relate to the ordinary course of our business nor reflect our underlying business performance: Following a Pennsylvania Supreme

Discontinued Products

Discontinued Products
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Discontinued Products	15. Discontinued Products Prior to 1993, we sold single-premium annuities (SPAs) and guaranteed investment contracts (GICs), primarily to employer sponsored pension plans.In 1993, we discontinued selling these products, and now we refer to these products as discontinued products. We discontinued selling these products because they were generating losses for us and we projected that they would continue to generate losses over their life (which is greater than 30 years); so we established a reserve for anticipated future losses at the time of discontinuance.This reserve represents the present value (at the risk-free rate of return at the time of discontinuance, consistent with the duration of the liabilities) of the difference between the expected cash flows from the assets supporting these products and the cash flows expected to be required to meet the obligations of the outstanding contracts.Because we projected anticipated cash shortfalls in our discontinued products, at the time of discontinuance we established a receivable from Large Case Pensions continuing products (which is eliminated in consolidation). Key assumptions in setting this reserve include future investment results, payments to retirees, mortality and retirement rates and the cost of asset management and customer service.In 1997, we began the use of a bond default assumption to reflect historical default experience.In 1995, we modified the mortality tables used in order to reflect a more up-to-date 1994 Uninsured Pensioners Mortality table.Other than these changes, since 1993 there have been no significant changes to the assumptions underlying the reserve. We review the adequacy of this reserve quarterly based on actual experience.As long as our expectation of future losses remains consistent with prior projections, the results of the discontinued products are applied to the reserve and do not affect net income.However, if actual or expected future losses are greater than we currently estimate, we may have to increase the reserve, which could adversely impact net income.If actual or expected future losses are less than we currently estimate, we may have to decrease the reserve, which could favorably impact net income.The reserve for anticipated future losses is included in future policy benefits on our balance sheet. As a result of this review, the reserve at September 30, 2009 reflects managements best estimate of anticipated future losses.In the nine months ended September 30, 2008, $44 million ($29 million after tax) of the reserve was released primarily due to favorable mortality and retirement experience compared to assumptions we previously made in estimating the reserve. The activity in the reserve for anticipated future losses on discontinued products for the nine months ended September 30, 2009 and 2008 was as follows (pretax): (Millions) 2009 2008 Reserve, beginning of period $ 790.4 $ 1,052.3 Operating loss (32.1 ) (43.1 ) Cumulative effect of new accounting standard as of April 1, 2009 (1) 42.1 - Net realized capital losses (12.1 ) (100.7 ) Reserve reduction

Subsequent Event

Subsequent Event
	9 Months Ended Sep. 30, 2009 USD / shares
Notes To Financial Statements [Abstract]
Subsequent Event	16. Subsequent Event In October 2009, we reached an agreement with Express Scripts, Inc. and one if its subsidiaries to settle certain litigation in which we were the plaintiff.Under the applicable settlement agreement, we received approximately$30 million, net of fees and expenses,which will be reflected in our results of operations in the fourth quarter of 2009.

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Documentation Information [Line Items]
Document Type	10-Q
Document Period End Date	2009-09-30
Amendment Flag	false

Entity Information

Entity Information (USD $)
In Billions, except Share data in Millions	9 Months Ended Sep. 30, 2009
Entity Information [Line Items]
Entity Registrant Name	AETNA INC /PA/
Entity Central Index Key	0001122304
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$12
Entity Common Stock Shares Outstanding	433.5