KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Wellpoint’s Profit Shrinks But Still Exceeds Wall Street’s Target

The insurer's gains were undermined by membership declines and high costs in some markets. However, the company still raised its outlook. But another insurer, Aetna, reported lower-than-expected quarterly profits.

Los Angeles Times: WellPoint Earnings Drop 8%; Insurer Seeks Medicare Growth
The nation's second-largest health insurer, after UnitedHealth Group Inc., runs Anthem Blue Cross in California and plans in 13 other states. It reported net income of $856.5 million, or $2.53 a share, for the three months ended March 31, compared to net of $926.6 million, or $2.44 a share, a year ago. Revenue grew 4% to $15.42 billion in the quarter (Terhune, 4/25).

The Wall Street Journal: WellPoint's Profit, Membership Shrinks
While health insurers, in general, have benefited from the sluggish pace of patient visits to operating rooms and doctors' offices, WellPoint's gains have been muted by unexpectedly high costs for seniors in Northern California, where the company picked up thousands of members with expensive health issues. The company has said it has fixed the problem by walking away from the difficult market, which is part of some planned membership losses for the new year aimed at boosting profit margins (Athavaley, 4/25).

Reuters: WellPoint Raises Outlook As Profit Tops Views
WellPoint Inc reported a lower quarterly profit as membership fell, but the results topped Wall Street's target, and the health insurer raised its outlook. The No. 2 health insurer by market value also said the performance of its Medicare business had improved after problems with such plans dragged down results in 2011. ... In an interview, WellPoint Chief Financial Officer Wayne DeVeydt said the company saw a small increase in the utilization of healthcare services in the latest quarter, but that was driven by the extra day because of the leap year and an unseasonable warm winter, which meant more people could get to the doctor (Krauskopf and Sherman, 4/25).

The Associated Press/Washington Post: WellPoint's 1st Quarter Profit Drops Nearly 8 Percent; Health Insurer Raises 2012 Forecast
The Indianapolis company said Wednesday that it expects its capital management to improve after earning $169 million in investment income in the first quarter. Company leaders also said they anticipate improvements in their main businesses and more growth from a Medicare Advantage segment that hurt WellPoint last year (4/25).

Reuters: Aetna Profit Misses Wall Street Target
Health insurer Aetna Inc reported a lower-than-expected quarterly profit on Thursday as higher claim costs and administrative expenses weighed on results. Aetna is the first major health insurer to miss earnings estimates after rivals WellPoint Inc and UnitedHealth Group Inc have posted higher-than-expected profits this quarter and raised their full-year outlooks (4/26).

The Associated Press: Insurer Aetna's 1Q Profit Falls 13 Percent
Aetna Inc.'s first-quarter profit fell 13 percent as benefits and expenses rose and the health insurer faced a tough comparison to year-ago earnings that included a one-time gain... The insurer's medical enrollment, which includes commercial health insurance and people covered by Medicare and Medicaid, fell 3 percent to 17.9 million in the quarter compared to the end of last year (4/26).

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