As we've already seen from the likes of UnitedHealth (NYSE:UNH), WellPoint (NYSE:WLP), and Humana (NYSE:HUM), these are still good times for health benefits companies. Employers and individuals continue to absorb rising premiums, and good trends in utilization and cost containment are keeping medical costs under control.

While I've been cautious about buying into any of those previously mentioned names, I've got to admit I'm a bit curious today about Aetna (NYSE:AET) -- another fine operator that seems to be trading at a rather attractive price.

I'd say the fourth quarter was a pretty good one for Aetna. Overall revenue rose about 14%, with a 14.6% rise in premium revenue making up the bulk of the number. Expense control was solid -- administrative costs rose less than 7% and the medical cost ratio fell almost a full point. That, in turn, led to a 38% rise in the company's per-share operating earnings.

Membership growth was a little sluggish on an annualized sequential basis (a bit less than 3%), but the company was able to boost membership for the full fiscal year by more than 8%. I for one will be curious to see how membership trends play out through 2006. Will the recent acquisitions from UnitedHealth and WellPoint provide a sustained boost? Will the focus of other companies on Medicare clients give Aetna more room to move in commercial membership growth (since Aetna is a pretty modest Medicare business)?

It's also worth mentioning that Aetna may feel enticed to do a deal of their own. I don't think they need a deal to stay competitive with UnitedHealth or WellPoint, but they still might view a company like CIGNA (NYSE:CI) or Coventry (NYSE:CVH) as a valuable strategic growth asset. As with most deals, the key here would be the price -- overpaying would just burn up shareholders' capital.

There will probably always be reasons to worry about this sector -- rising medical costs, limited future premium increases, government interference, etc. -- but I believe those risks are generally manageable. Furthermore, I like Aetna's cash flow production and think that it makes these shares worth a closer look.

For more Foolish thoughts on health insurance:

Coventry and UnitedHealth are Motley Fool Stock Advisor recommendations.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).