Aetna 10-Q 29 Apr 10 2010 Q1 Quarterly report Financial data

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Revenue:
Health care premiums	6895.1		6992.2
Other premiums	474.7		485.1
Fees and other revenue (1)	899.8	[1]	893	[1]
Net investment income	275.2		249.2
Net realized capital gains (losses)	76.7		-4.8
Total revenue	8621.5		8614.7
Benefits and expenses:
Health care costs (2)	5,691	[2]	5804.2	[2]
Current and future benefits	527		503.3
Operating expenses
Selling expenses	321.5		322.5
General and administrative expenses	1195.7		1229.8
Total operating expenses	1517.2		1552.3
Interest expense	60.9		61.5
Amortization of other acquired intangible assets	24.4		24.5
Total benefits and expenses	7820.5		7945.8
Income before income taxes	801		668.9
Income taxes:
Current	216.1		208.3
Deferred	22.3		22.8
Total income taxes	238.4		231.1
Net income	562.6		437.8
Earnings per common share:
Basic	1.3		0.97
Diluted	1.28		0.95
[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 $20.4 million and $14.8 million (net of pharmaceutical and processing costs of $353.6 million and $397.9 million) for the three months ended March 31, 2010 and 2009, respectively.
[2]Health care costs have been reduced by Insured member co-payments related to our mail order and specialty pharmacy operations of $31.2 million and $30.0 million for the three months ended March 31, 2010 and 2009, respectively.

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Current assets:
Cash and cash equivalents	1570.4	1203.6
Investments	2851.9	2922.7
Premiums receivable, net	758.8	630.4
Other receivables, net	634	626.7
Accrued investment income	216	209.2
Collateral received under securities loan agreements	422.4	210
Income taxes receivable	0	89.5
Deferred income taxes	284.7	383.4
Other current assets	688.2	551.4
Total current assets	7426.4	6826.9
Long-term investments	17809.5	17051.1
Reinsurance recoverables	978	986.9
Goodwill	5145.7	5146.2
Other acquired intangible assets, net	566.3	590.7
Property and equipment, net	556.3	551
Deferred income taxes	350.5	333.4
Other long-term assets	770.6	781.1
Separate Accounts assets	5369.5	6283.1
Total assets	38972.8	38550.4
Current liabilities:
Health care costs payable	2965.4	2895.3
Future policy benefits	736	739.6
Unpaid claims	579	559.5
Unearned premiums	411.2	306.4
Policyholders' funds	831.9	788.3
Collateral payable under securities loan agreements	422.4	210
Short-term debt	479.6	480.8
Current portion of long-term debt	449.7	0
Income taxes payable	117.3	0
Accrued expenses and other current liabilities	2851.9	2484.3
Total current liabilities	9844.4	8464.2
Future policy benefits	6433.2	6470.1
Unpaid claims	1470.8	1,453
Policyholders' funds	1307.1	1294.1
Long-term debt	3190.1	3639.5
Other long-term liabilities	1433.8	1442.6
Separate Accounts liabilities	5369.5	6283.1
Total liabilities	29048.9	29046.6
Commitments and contingencies (Note 12)	--	--
Shareholders' equity:
Common stock ($.01 par value; 2.7 billion shares authorized; 424.9 million and 430.8 million shares issued and outstanding in 2010 and 2009, respectively) and additional paid-in capital	499.2	470.1
Retained earnings	10567.4	10256.7
Accumulated other comprehensive loss	-1142.7	(1,223)
Total shareholders' equity	9923.9	9503.8
Total liabilities and shareholders' equity	38972.8	38550.4

Parenthetical to Consolidated B

Parenthetical to Consolidated Balance Sheets (USD $)
	Mar. 31, 2010	Dec. 31, 2009
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	424,900,000	430,800,000

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (Unaudited) (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
Beginning balance (in shares) at Dec. 31, 2008	456.3
Beginning balance at Dec. 31, 2008		351.2	9716.5	-1881.3		8186.4
Comprehensive income:
Net Income (Loss)			437.8		437.8	437.8
Other comprehensive income (loss) (Note 6):
Net unrealized gains (losses) on securities				-65.3		-65.3
Net foreign currency and derivative gains (losses)				2.4		2.4
Pension and OPEB plans				34.7		34.7
Other comprehensive income (losses)				-28.2	-28.2	-28.2
Total comprehensive income					409.6
Common shares issued for benefit plans, including tax benefits		44.9				44.9
Common shares issued for benefit plans, including tax benefits (in shares)	1
Repurchases of common shares		-0.1	-276.9			(277)
Repurchases of common shares (in shares)	-10.4
Ending balance at Mar. 31, 2009		396	9877.4	-1909.5		8363.9
Ending balance (in shares) at Mar. 31, 2009	446.9
Beginning balance (in shares) at Dec. 31, 2009	430.8
Beginning balance at Dec. 31, 2009		470.1	10256.7	(1,223)		9503.8
Comprehensive income:
Net Income (Loss)			562.6		562.6	562.6
Other comprehensive income (loss) (Note 6):
Net unrealized gains (losses) on securities				52.4		52.4
Net foreign currency and derivative gains (losses)				-4.6		-4.6
Pension and OPEB plans				32.5		32.5
Other comprehensive income (losses)				80.3	80.3	80.3
Total comprehensive income					642.9
Common shares issued for benefit plans, including tax benefits		29.2				29.2
Common shares issued for benefit plans, including tax benefits (in shares)	1.3
Repurchases of common shares		-0.1	-251.9			(252)
Repurchases of common shares (in shares)	-7.2
Ending balance at Mar. 31, 2010		499.2	10567.4	-1142.7		9923.9
Ending balance (in shares) at Mar. 31, 2010	424.9

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows From Operating Activities
Net income	562.6	437.8
Adjustments to Reconcile Net Income To Net Cash Provided By Operating Activities
Net realized capital (gains) losses	-76.7	4.8
Depreciation and amortization	102.3	97
Equity in earnings of affiliates, net	-11.4	10.2
Stock-based compensation expense	27.6	37.2
Accretion of net investment discount	-11.6	-16.5
Changes In Assets And Liabilities
Accrued investment income	-6.8	4
Premiums due and other receivables	-93.3	-256.9
Income taxes	235.6	216.7
Other assets and other liabilities	-66.1	-68.7
Health care and insurance liabilities	174.7	361.7
Other, net	0.4	(1)
Net cash provided by operating activities	837.3	826.3
Cash Flows From Investing Activities
Proceeds from sales and maturities of investments	2462.2	2490.7
Cost of investments	-2686.4	-2287.3
Increase in property, equipment and software	-74.5	-88.6
Cash used for acquisition, net of cash acquired	-0.1	0
Net cash (used for) provided by investing activities	-298.8	114.8
Cash Flows From Financing Activities
Net repayment of short-term debt	-1.3	-114.8
Deposits and interest credited for investment contracts	1.6	1.9
Withdrawals of investment contracts	-3.7	-3.9
Common shares issued under benefit plans	3.6	3.7
Stock-based compensation tax benefits	(1)	3.6
Common shares repurchased	(162)	-263.8
Collateral on interest rate swaps	-8.9	0
Net cash used for financing activities	-171.7	-373.3
Net increase in cash and cash equivalents	366.8	567.8
Cash and cash equivalents, beginning of period	1203.6	1179.5
Cash and cash equivalents, end of period	1570.4	1747.3
Supplemental Cash Flow Information
Interest paid	35	36.8
Income taxes paid	3.7	10.9

Organization

Organization
	3 Months Ended Mar. 31, 2010
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 14 beginning on page20 or additional information).

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Mar. 31, 2010
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 2009 Annual Report on Form 10-K (our 2009 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 2009 Annual Report, unless the information contained in those disclosures materially changed or is required by GAAP.We have evaluated subsequent events from the balance sheet date through the date the financials were issued and determined there were no other items to disclose. 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 Variable Interest Entities In June 2009, the Financial Accounting Standards Board (FASB) released revised accounting guidance for variable interest entities (VIEs).This accounting guidance removes the quantitative-based risks-and-rewards calculation previously used to assess whether a company must consolidate a VIE and, instead, requires a variable interest holder to qualitatively assess whether it has a controlling financial interest in the VIE.This accounting guidance was effective on January 1, 2010.The adoption of this new accounting guidance did not impact our financial position or results of operations.Refer to Note 5 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 require OTTI to be recognized if either we determine a credit-related loss has occurred or we have the intention to sell a security that is in an unrealized capital loss position. Refer to Note 5 beginning on page7 for additional information.

Earnings Per Common Share

Earnings Per Common Share
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Earnings Per Share	3. Earnings Per Common Share Basic earnings per share (EPS) is computed by dividing net income (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 if the effect is dilutive. The computations of basic and diluted EPS for the three months ended March 31, 2010 and 2009 are as follows: (Millions, except per common share data) 2010 2009 Net income $ 562.6 $ 437.8 Weighted average shares used to compute basic EPS 431.4 452.7 Dilutive effect of outstanding stock-based compensation awards (1) 8.2 8.9 Weighted average shares used to compute diluted EPS 439.6 461.6 Basic EPS $ 1.30 $ .97 Diluted EPS $ 1.28 $ .95 (1) Approximately 18.9 and 19.5 million SARs (with exercise prices ranging from $32.11 to $59.76) and 5.8 and 6.2 million stock options (with exercise prices ranging from $33.38 to $42.35 and $35.34 to $42.35) were not included in the calculation of diluted EPS for the three months ended March 31, 2010 and 2009, respectively, as their exercise prices were greater than the average market price of Aetna common shares during such periods.

Operating Expenses

Operating Expenses
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Operating Expense	4. Operating Expenses For the three months ended March 31, 2010 and 2009, 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: (Millions) 2010 2009 Selling expenses $ 321.5 $ 322.5 General and administrative expenses: Salaries and related benefits 767.8 750.2 Other general and administrative expenses 427.9 (1) 479.6 Total general and administrative expenses 1,195.7 1,229.8 Total operating expenses $ 1,517.2 $ 1,552.3 (1) Includes litigation-related insurance proceeds of $70.0 million for 2010.Refer to the reconciliation of operating earnings to net income in Note 13 beginning on page19 for additional information.

Investments

Investments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Investments	5. Investments Total investments at March 31, 2010 and December 31, 2009 were as follows: March 31, 2010 December 31, 2009 (Millions) Current Long-term Total Current Long-term Total Debt and equity securities available for sale $ 2,750.7 $ 15,098.1 $ 17,848.8 $ 2,834.8 $ 14,324.9 $ 17,159.7 Mortgage loans 98.4 1,457.6 1,556.0 86.1 1,507.9 1,594.0 Other investments 2.8 1,253.8 1,256.6 1.8 1,218.3 1,220.1 Total investments $ 2,851.9 $ 17,809.5 $ 20,661.4 $ 2,922.7 $ 17,051.1 $ 19,973.8 Debt and Equity Securities Debt and equity securities available for sale at March 31, 2010 and December 31, 2009 were as follows: Gross Gross Amortized Unrealized Unrealized Fair (Millions) Cost Gains Losses Value March 31, 2010 Debt securities: U.S. government securities $ 1,947.6 $ 56.3 $ (.9) $ 2,003.0 States, municipalities and political subdivisions 2,159.9 80.6 (20.5) 2,220.0 U.S. corporate securities 6,866.9 484.5 (32.1) 7,319.3 Foreign securities 2,690.7 210.7 (15.4) 2,886.0 Residential mortgage-backed securities 1,337.0 54.8 (3.3) (1) 1,388.5 Commercial mortgage-backed securities 1,146.0 68.4 (59.8) (1) 1,154.6 Other asset-backed securities 475.0 25.5 (5.7) (1) 494.8 Redeemable preferred securities 347.5 21.5 (26.2) 342.8 Total debt securities 16,970.6 1,002.3 (163.9) 17,809.0 Equity securities 35.3 7.3 (2.8) 39.8 Total debt and equity securities (2) $ 17,005.9 $ 1,009.6 $ (166.7) $ 17,848.8 December 31, 2009 Debt securities: U.S. government securities $ 1,801.3 $ 50.7 $ (5.2) $1,846.8 States, municipalities and political subdivisions 2,022.2 80.7 (27.5) 2,075.4 U.S. corporate securities 6,741.9 497.1 (54.4) 7,184.6 Foreign securities 2,554.5 210.9 (20.9) 2,744.5 Residential mortgage-backed securities 1,375.8 49.4 (5.0) (1) 1,420.2 Commercial mortgage-backed securities 1,109.8 37.6 (104.0) (1) 1,043.4 Other asset-backed securities 419.6 25.0 (8.2) (1) 436.4 Redeemable preferred securities 381.9 27.8 (41.0) 368.7 Total debt securities 16,407.0 979.2 (266.2) 17,120.0 Equity securities 35.3 7.9 (3.5) 39.7 Total debt and equity securities (2) $ 16,442.3 $ 987.1 $(269.7) $17,159.7 (1) At March 31, 2010 and December 31, 2009, we held securities for which we had recognized a credit-related impairment in the past.For the three months ended March 31, 2010, we recognized $6.0 million of non-credit-related impairments in other comprehensive loss related to these securities (as of March 31, 2010 and December 31, 2009, these securities had a net unrealized capital loss of $12.0 million and $17.2 million, respectively). (2) Investment risks associated with our experience-rated and discontinued products generally do not impact our results of operations (refer to Note 14 beginning on page20 for additional information on our accounting for

Other Comprehensive

Other Comprehensive (Loss) Income
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Other Comprehensive Income	6. 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 three months ended March 31, 2010 and 2009: Net Unrealized Gains (Losses) Pension and OPEB Plans Total Securities Foreign Accumulated Currency Unrecognized Unrecognized Other Previously and Net Actuarial Prior Service Comprehensive (Millions) Impaired (1) All Other Derivatives Losses Cost Income (Loss) Three months ended March 31, 2010 Balance at December 31, 2009 $ 100.3 $ 235.7 $25.3 $ (1,623.8) $ 39.5 $ (1,223.0) Net unrealized gains (losses) ($226.6 pretax) 33.6 118.4 (4.7) - - 147.3 Reclassification to earnings ($43.2 pretax) (51.1) (48.5) .1 33.4 (.9) (67.0) Other comprehensive (loss) income (17.5) 69.9 (4.6) 33.4 (.9) 80.3 Balance at March 31, 2010 $ 82.8 $ 305.6 $20.7 $ (1,590.4) $ 38.6 $ (1,142.7) (1) Represents the non-credit-related component of previously impaired debt securities that we do not intend to sell and subsequent appreciation in the fair value of securities that we intend to sell. Net Unrealized Gains (Losses) Pension and OPEB Plans Total Accumulated Other Comprehensive (Loss) Income (Millions) Securities Foreign Currency and Derivatives Unrecognized Net Actuarial Losses Unrecognized Prior Service Cost Three months ended March 31, 2009 Balance at December 31, 2008 $ (229.3) $ (8.7) $ (1,686.6) $ 43.3 $ (1,881.3) Net unrealized losses ($(79.1) pretax) (60.9) 9.5 - - (51.4) Reclassification to earnings ($41.9 pretax) (4.4) (7.1) 35.7 (1.0) 23.2 Other comprehensive (loss) income (65.3) 2.4 35.7 (1.0) (28.2) Balance at March 31, 2009 $ (294.6) $ (6.3) $ (1,650.9) $ 42.3 $ (1,909.5)

Financial Instruments

Financial Instruments
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Financial Instruments	7. 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 another basis, 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 our financial instruments 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 (inputs) 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. Financial assets and liabilities are classified based upon the lowest level of input that is significant to the valuation.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 value 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.Thus, financial assets and liabilities may be classified in Level 3 even though there may be some significant inputs that may be readily available. 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 SecuritiesWhere 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 primarily of U.S. Treasury securities.If Level 1 val

Defined Benefit Retirement Plan

Defined Benefit Retirement Plans
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Employee Benefit Plan	8. Defined Benefit Retirement Plans Components of the net periodic benefit cost of our noncontributory defined benefit pension plans and other postretirement benefit (OPEB) plans for the three months ended March 31, 2010 and 2009 were as follows: Pension Plans OPEB Plans (Millions) 2010 2009 2010 2009 Operating component: Service cost $ 15.3 $ 12.0 $ .1 $ .1 Amortization of prior service cost (.5) (.5) (.9) (1.0) Total operating component (1) 14.8 11.5 (.8) (.9) Financing component: Interest cost 76.6 79.1 4.5 5.5 Expected return on plan assets (88.3) (79.7) (.9) (1.0) Recognized net actuarial loss 50.3 54.1 1.1 .8 Total financing component (1) 38.6 53.5 4.7 5.3 Net periodic benefit cost $ 53.4 $ 65.0 $ 3.9 $ 4.4 (1) The operating component of this expense is allocated to our business segments and the financing component is allocated to our Corporate Financing segment.Our Corporate Financing segment is not a business segment.It is added to our business segments to reconcile to our consolidated results.Refer to Note 13 beginning on page19 for additional information on our business segments.

Debt

Debt
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Debt	9. Debt The carrying value of our long-term debt at March 31, 2010 and December 31, 2009 was as follows: March 31, December 31, (Millions) 2010 2009 Senior notes, 5.75%, due 2011 $ 449.9 $ 449.9 Senior notes, 7.875%, due 2011 449.7 449.5 Senior notes, 6.0%, due 2016 747.2 747.1 Senior notes, 6.5%, due 2018 498.8 498.8 Senior notes, 6.625%, due 2036 798.6 798.6 Senior notes, 6.75%, due 2037 695.6 695.6 Total long-term debt 3,639.8 3,639.5 Less current portion of long-term debt (1) 449.7 - Long-term debt, less current portion $ 3,190.1 $ 3,639.5 (1) At March 31, 2010, the 7.875% senior notes due March 2011 have been classified as current in the accompanying consolidated balance sheet at March 31, 2010. At March 31, 2010 and December 31, 2009, we had approximately $480 million and $481 million, respectively, of commercial paper outstanding with a weighted average interest rate of .32% and .38%, respectively. At March 31, 2010, 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 March 31, 2010.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 at or below .5 to 1.0.For this purpose, consolidated capitalization equals total 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 March 31, 2010. There were no amounts outstanding under the Facility at March 31, 2010. During 2010 and 2009, we entered into five 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 March 31, 2010 and December 31, 2009, the interest rate swaps had an aggregate fair value of $34.6 million and $42.2 million, respectively.We also recorded a $7.6 million unrealized capital loss and $3.5 million unrealized capital gain related to these interest rate swaps in other comprehensive income for the three months ended March 31, 2010 and 2009, respectively.

Capital Stock

Capital Stock
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Capital Stock	10. Capital Stock On February 27, 2009, our Board of Directors (the Board) authorized a share repurchase program for the repurchase of up to $750 million of our common stock.During the three months ended March 31, 2010, we repurchased approximately 7 million shares of common stock at a cost of approximately $252 million (approximately $90 million of these repurchases were settled in early April).At March 31, 2010, we had remaining authorization to repurchase an aggregate of up to approximately $339 million of common stock under the February 27, 2009 Board authorization. On February 8, 2010, approximately .8 million performance stock units (PSUs), 1.6 million market stock units (MSUs) and 1.1 million restricted stock units (RSUs) were granted to certain employees.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. The performance period for the PSUs ends on December 31, 2010, and the vesting period ends on February 8, 2012.The number of vested MSUs (which could range from zero to 150% of the original number of units granted) is based on the weighted average closing price of our common stock for the thirty trading days prior to the vesting date.The MSUs have a two-year vesting period.For each vested RSU, employees receive one share of common stock, net of taxes, at the end of the vesting period.The RSUs will become 100% vested approximately three years from the grant date, with one-third vesting each December.

Dividend Restrictions and Statu

Dividend Restrictions and Statutory Surplus
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Dividend Restrictions	11. Dividend Restrictions and Statutory Surplus Under regulatory requirements at March 31, 2010, the amount of dividends that may be paid to Aetna through the end of 2010 by our insurance and HMO subsidiaries without prior approval by regulatory authorities is approximately $1.1 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 $7.0 billion and $6.8 billion at March 31, 2010 and December 31, 2009, respectively.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Commitment and Contingencies	12. 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 or have settled similar litigation.Among other things, these lawsuits allege 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 by out-of-network providers. 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.Discovery has commenced in MDL 2020, and the court has not set a trial date.We intend to vigorously defend ourselves against the claims brought in these cases. 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 that 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 r

Segment Information

Segment Information
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Segment Information	13. 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 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). Summarized financial information of our segments for the three months ended March 31, 2010 and 2009 was as follows: Health Group Large Case Corporate Total (Millions) Care Insurance Pensions Financing Company 2010 Revenue from external customers $ 7,765.4 $ 458.9 $ 45.3 $ - $ 8,269.6 Operating earnings (loss) (1) 460.1 28.5 9.7 (67.7) 430.6 2009 Revenue from external customers $ 7,854.6 $ 463.1 $ 52.6 $ - $ 8,370.3 Operating earnings (loss) (1) 469.4 42.1 9.2 (78.1) 442.6 (1) Operating earnings (loss) excludes net realized capital gains or losses and the other item described in the reconciliation below. A reconciliation of operating earnings to net income for the three months ended March 31, 2010 and 2009 was as follows: (Millions) 2010 2009 Operating earnings $ 430.6 $ 442.6 Litigation-related insurance proceeds (1) 45.5 - Net realized capital gains (losses) (2) 86.5 (4.8) Net income $ 562.6 $ 437.8 (1) In addition to net realized capital gains (losses) the following other item is excluded from first quarter 2010 operating earnings because we believe it neither relates to the ordinary course of our business nor reflects our underlying business performance: Following a Pennsylvania Supreme Court ruling in June 2009, we received $45.5 million ($70.0 million pretax) in April 2010 from one of our liability insurers related to certain litigation we settled in 2003.We are continuing to litigate similar claims against certain of our other liability insurers. (2) At March 31, 2010, we released a $9.8 million valuation allowance previously established on our deferred tax assets related to realized capital gains (losses).

Discontinued Products

Discontinued Products
	3 Months Ended Mar. 31, 2010
Notes to Financial Statements [Abstract]
Discontinued Products	14. 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 current reserve reflects managements best estimate of anticipated future losses.The reserve for anticipated future losses is included in future policy benefits on our balance sheet. The activity in the reserve for anticipated future losses on discontinued products for the three months ended March 31, 2010 and 2009 was as follows (pretax): (Millions) 2010 2009 Reserve, beginning of period $ 789.2 $ 790.4 Operating income (loss) 3.0 (13.9) Net realized capital gains (losses) 16.1 (9.4) Reserve, end of period $ 808.3 $ 767.1 During the three months ended March 31, 2010, our discontinued products reflected operating income and net realized capital gains, both primarily attributable to the favorable investment conditions that existed from the latter half of 2009 through the first quarter of 2010.We have evaluated the operating income in 2010 against our expectations of future cash flows assumed in estimating the

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Text Block]
Document Type	10-Q
Document Period End Date	2010-03-31
Amendment Flag	false

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010
Entity [Text Block]
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	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$14,900,000,000
Entity Common Stock Shares Outstanding	424,900,000
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1