(Bloomberg) -- Cigna Corp. raised its profit forecast for the year as it added more customers to its health insurance plans.
Earnings excluding some items will be $1.95 billion to $2 billion, or $7.25 to $7.45 a share, the Bloomfield, Connecticut- based company said in a statement today. Cigna previously predicted $7.20 to $7.40 a share.
“We continue to execute well in established growth markets and invest strategically to position ourselves for success in emerging marketplaces, which provide us with a strong foundation to drive long-term growth,” Chief Executive Officer David Cordani said in the statement.
Cigna follows Aetna Inc., the U.S.’s third-largest health insurer, in raising its forecast this week. Health insurers are gaining customers from the Patient Protection and Affordable Care Act, which helped 7.3 million Americans enroll in plans as of mid-August, according to the U.S. The Congressional Budget Office expects about 13 million people to sign up next year.
Cigna has participated in relatively few of the new law’s marketplaces for insurance, compared to its competitors. It was in five states this year and has said it plans to add three more for 2015.
The law also expanded Medicaid, the joint U.S.-state insurance program for the poor, by raising income thresholds for the program to get more people to qualify. Next year, 11 million people will be covered by Medicaid, according to the Congressional Budget Office, up from 7 million this year.
“Growth to government programs, specifically Medicaid, is one way we believe investors would like to see Cigna continue to diversify,” said Jennifer Lynch, an analyst at BMO Capital Markets Corp., in a note to clients today.
--With assistance from Phil Serafino in Paris.
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