WellPoint Reports Positive Third-Quarter Earnings
Thousand Oaks-based health insurer WellPoint Health Networks on Wednesday said its third-quarter profits almost doubled from a year earlier because of enrollment growth, lower administrative expenses and investment gains, the Los Angeles Times reports. WellPoint's third-quarter profits rose to $211.3 million, or $1.38 a share, from $108.4 million, or 82 cents a share, a year earlier. Excluding investment gains and other special items, WellPoint earned $1.17 a share. Revenue increased 39%, to $4.52 billion, and nationwide enrollment rose 27% from a year earlier, to about 13 million at the end of September. The enrollment growth was due in large part to acquisitions in Missouri and Texas. WellPoint said it reduced its overhead and selling costs to 16.3% of revenue, from 17.5% a year earlier. WellPoint's medical loss ratio, the cost of health care services divided by premiums collected, was 81.7%, one of the lowest among insurers (Lee, Los Angeles Times, 10/24).
Woodland Hills-based managed care organization Health Net on Thursday said its third-quarter profits rose 32% from a year earlier because of "strong premium increases," a "surprisingly big drop in the medical cost ratio" and "an aggressive strategy" of cutting unprofitable business lines, the Los Angeles Times reports. Health Net's third-quarter profits increased to $69 million, or 55 cents a share, from $2.3 million, or two cents a share, a year earlier. Revenue for the third quarter was $2.58 billion, about the same as a year earlier. Health Net's Medicare HMO enrollment fell 19% and overall enrollment dipped about 5% from a year earlier, to 3.8 million. However, Health Net "boosted" enrollment in its Medicaid HMO plan, which has been profitable, according to the Times. Health Net officials said the company plans to increase premiums an average of 12.5% next year and estimated full-year earnings of $2.10 to $2.12 per share for this year and $2.42 to $2.47 for 2003 (Lee, Los Angeles Times, 10/25).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.