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WellPoint Posts Profit for the 2nd Quarter- Up 4% With Profits Exceeding Over 700 Million

Posted Jul 28 2010 8:44am

As with the other large insurers, members and revenue was down but profits are up.  Insurers are looking for the areas where they make money.  California is a big market for WellPoint and earlier this year attracted a ton of attention with the huge premium increases they were projecting, which were reduced as affordability entered the picture.

All carriers have reduced numbers of employees and this will continue at automation comes into play with even more software being included relative to claims processing.  That area of healthcare with risk management assessments continues to grow and is not popular with consumers by all means and lead to some of the healthcare reform policies we see today coming into play.

Over the years the battles have continued with care and paying claims and I somewhat ponder if the attitude of how business was handled over the last years had maintained a more “human” element if the battle ground would be a bit less intense and perhaps have allowed more room for working together.  BD 

WellPoint Inc. (WLP) posted a 4% increase in second-quarter profit on lower claims costs while enrollment declined and the health insurer's revenue fell short of Wall Street estimates. 

The largest U.S. managed-care provider by membership became the third major commercial health insurer in recent days to top analyst profit estimates and raise its full-year forecast in large part on favorable development of prior-period claims.

The strong results haven't helped managed-care stocks much, however, as the market remains uncertain about health-overhaul regulations kicking in next year that may limit profits by requiring floors on patient-care spending.

Regulatory scrutiny caught WellPoint in particular this quarter, as a delayed and trimmed rate increase in its California individual market damped results.

Revenue at its commercial segment, the largest by revenue, fell 9% while profit jumped 28%. Consumer business revenue fell 2.4% and profit dropped 21%.

The company said it continues to price its commercial business so that the premium yield exceeds growth in total costs. While WellPoint maintained its forecast for group medical costs to grow by 8% plus or minus 50 basis points this year, it now expects the rate to hit the lower end of that range.

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