WellPoint Raises Profit Forecast on Obamacare Sign-Up Boost
Insurer accounts for 769,000 of the 8 million people who signed up for coverage under the Patient Protection and Affordable Care Act.
INN Breaking News, July 30, 2014
(Bloomberg) -- WellPoint Inc. raised its full-year profit forecast as the second-biggest U.S. health insurer saw a boost in customers getting insurance through Obamacare.
The company raised its full-year adjusted earnings forecast 20 cents, to $8.60 or more per share, the second time it’s raised its projection this year. Profit excluding one-time items was $2.44 per share, 18 cents more than expected by 22 analysts surveyed by Bloomberg.
Revenue rose 4.4 percent to $18.5 billion as it added 1.6 million new members this quarter compared to a year before, the Indianapolis-based company said today in a statement. Many were in Medicaid, the U.S. program for the poor that was expanded by the 2010 health care overhaul.
WellPoint has made the biggest commitment of any publicly traded insurer to the Obamacareinsurance markets, and accounts for 769,000 of the 8 million people who signed up for insuranceunder the Patient Protection and Affordable Care Act. That was more than the company had forecast earlier this year.
Investors are watching to see if that bet will pay off, which will largely depend on how healthy those new customers are and whether their medical costs will be covered by the premiums WellPoint has charged.
Net income for the second quarter was $731 million, or $2.56 a share, compared to $800 million, or $2.64 a share, a year earlier. WellPoint has said those signing up through the Obamacare exchanges were younger than anticipated, an indication they would have lower medical costs.
Rival insurer Humana Inc., based in Louisville, Kentucky, also reported net profit today that fell 18 percent to $344 million, or $2.19 per share, matching the average of 22 analysts surveyed by Bloomberg.
WellPoint said it added 121,000 members through Medicaid, the insurance program for the poor. Obamacare has expanded who can qualify for Medicaid adding more than 6 million to the program nationwide.
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