WellPoint Health Networks Q1 Profit Rose 21%
WellPoint Health Networks, one of "California's biggest health insurers," yesterday announced that its first quarter profit rose 21%, largely due to membership gains, Bloomberg News/Los Angeles Times reports. The insurer's net income rose to $96.5 million, or $1.48 per share, from $79.6 million, or $1.23 per share, in the first quarter last year. Revenue rose 22% to $2.6 billion. WellPoint added more than two million customers, mainly in California and Georgia, in the first quarter, for a total of 9.8 million customers. The company said that costs of medical care, other benefits and administrative expenses rose by 22% to $2.4 billion, partly due to the March purchase of Cerulean Cos. Meanwhile, Wellpoint's medical loss ratio -- "the portion of every premium dollar that pays for medical care" -- dropped to 80.8% in the first quarter, from 81% the same quarter a year ago. According to analysts, WellPoint, the parent of Blue Cross of California, "has a record of setting premiums high enough to keep ahead of medical costs." Prudential Securities Inc. analyst David Shove added that WellPoint has "some of the best management information systems in the business. That keeps them on top of cost trends" (Bloomberg News/Los Angeles Times, 4/26).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.