PACIFICARE: Reports Second Quarter Profit Increase
PacifiCare Health Systems, Inc. announced yesterday that its second quarter profit rose 2.7%, as higher premiums helped offset higher costs, Bloomberg News/Los Angeles Times reports. Operations profit rose to $70.8 million, or $2.01 per share, from $68.9 million, or $1.49 a share one year earlier. Earnings exceeded analysts' expectations of $1.90 a share. Revenue also increased from $2.46 billion to $2.85 billion. Overall, PacifiCare membership rose 11% to four million customers, with 238,000 gained from the company's acquisition of Dallas-based Harris Methodist Health Plan in February. PacifiCare raised its premiums 8%, as the percentage of premiums used to cover medical costs rose to 85.8% from 85% the year before. The Santa Ana- based company, which generates roughly 60% of sales from its Medicare HMO patients and serves one million Medicare beneficiaries, complained that medical costs are rising faster than payments under the Medicare program. In July, PacifiCare announced that it would end Medicare HMO coverage in 15 counties on Jan. 1, affecting more than 26,600 Medicare enrollees. Second quarter earnings results were announced after U.S. markets closed, with PacifiCare's shares rising $1.06 to close at $67.19 on Nasdaq (8/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.