Aetna Stock Up 12 Percent on Word of Downsizing

Since Aetna announced at the beginning of the week it will cut about 5,000 jobs, and take $565 million in fourth-quarter charges, the company’s shares rose 12 percent. On Jan. 1, Aetna will drop an estimated 340,000 members from its Medicare health-maintenance organizations.

The company will also drop some 300,000 to 350,000 customers from its employer HMOs and about 1.5 million Prudential customers. About 1 million other Prudential customers will be moved to Aetna plans. The company also plans to raise prices next year between 11 and 13 percent for employer health plans and about 4 percent in its remaining Medicare markets.