CLDF Title
Home | Contact Us | Bookmark
NASH HCC
Centers of Educational Expertise  
Live CME Events Webcasts Slide Library Abstract Library CLDF 2019 Year in Review Conference Highlights
 
Back  
 
WellPoint's Obamacare business making a profit, so far

WellPoint's Obamacare business making a profit, so far

By Caroline Humer

(Reuters) - WellPoint Inc on Wednesday said that its Obamacare exchange business was sustainable so far, echoing comments from another major insurer last week that these new customers have cost as much as expected, not more.

The report lifted shares in WellPoint, the second-largest U.S. health insurer, by about 5 percent and gave its next largest competitor Aetna Inc a 1.5 percent increase as it eased some investor concerns about the profitability of this business.

"They are saying that there were no issues in the exchange experience so far. They are growing gang busters if you will. Even if there were any issues that manifested themselves going forward, they have very strong reserves and good overall results," Leerink Partners analyst Ana Gupte said.

The exchanges, created under President Barack Obama's healthcare reform law, have sold new health plans to more than 8 million people. Insurers, and critics, have worried about the health of these new customers and whether the business will be a drain on insurers and U.S. taxpayers.

WellPoint is selling individual policies on the new exchanges in the 14 states where it operates Blue Cross Blue Shield plans. It has the most total customers on the exchanges, about 150,000 more than Aetna, which is in 17 states.

WellPoint said it added 400,000 new customers during the quarter and expects a total of 600,000 this year after it accounts for all enrollees, including those who signed up after a Feb. 15 cut-off for March 1 coverage.

The business is "in the green," with profit margins of 3 to 5 percent, its top finance executive said.

The age and general characteristics of the customers as well as the type of insurance coverage they have purchased were in line with the premium prices it set, WellPoint said, similar to the experience Aetna Inc described last week.

WellPoint Chief Financial Officer Wayne DeVeydt cautioned he wants to see the remaining enrollments in the second quarter before declaring a win.

"I want to make sure that converts before we officially say that we've got it all right, but it's very encouraging right now," DeVeydt said.

WellPoint's comments were more positive than Aetna's, which said that pricing had been in line with customer demographics but that ultimately it continued to see the business as a "headwind" for 2014 results.

Like Aetna, WellPoint also said it is keeping an eye on the costs of the pricey new hepatitis C treatments, which cost $50 million in the first quarter alone. It has built in $100 million in additional hepatitis C drug costs for 2014, the company said.

Gilead Sciences' new treatment Sovaldi broke sales launch records during the first quarter with its $84,000 price tag. An estimated 3.2 million Americans have this virus that can cause liver wasting disease and for the first time, this drug promises many of them a cure.

NET PROFIT FALLS

Net profit fell during the quarter, largely because of investment spending related to healthcare reform and higher administrative costs of adding new commercial customers.

WellPoint, which runs Anthem and Empire Blue Cross Blue Shield plans, reported net income of $701 million, or $2.40 per share, down from $885 million, or $2.89 per share, a year earlier.

The company said it had spent less on medical claims than expected, partly due to bad weather. Taxes were also lower than expected, while overall costs remained constrained.

The company added 1.2 million members in its commercial business, which includes large national employers, local employers and the individual markets.

 
 
 
 
                               
 
HEPATITIS
HBV
HCV
HDV
 
 
HCC
Slide Library
Abstract Library
 
HE
Webcasts
Slide Library
Abstract Library
 
HRS
Webcasts
Slide Library
Abstract Library
 
NASH
Webcasts
Slide Library
Abstract Library
 
 
PBC
Webcasts
Slide Library
Abstract Library
 
 
THROMBOCYTOPENIA
Webcasts
Slide Library
   
   
 
About CLDF
Mission Statement
Board of Trustees
Board of Advisors/Faculty
2019 GI Fellow Board of Advisors
 
Other Resources
Liver News Library
Journal Abstracts
Hep C Link to Care
 
Centers of
Educational Expertise
Hepatology
Substance Use Disorder
             
CLDF Follow Us
   
  The Chronic Liver Disease Foundation is a non-profit organization with content developed specifically for healthcare professionals.
© Copyright 2012-2021 Chronic Liver Disease Foundation. All rights reserved. This site is maintained as an educational resource for US healthcare providers only.
Use of this Web site is governed by the Chronic Liver Disease Foundation terms of use and privacy statement.