WellCare Health Plans
gained 60,000 members in Medicaid
plans during its first quarter as a result of eligibility expansion under the Patient Protection and Affordable Care Act
, the Tampa, Fla.-based insurer reported in its earnings statement Tuesday.
The company gained Medicaid enrollees year over year in Kentucky through program growth and in Missouri through an acquisition in April 2013. But it lost members when it exited the Ohio Medicaid program in June 2013.
Its acquisition of Windsor Health Group, which closed Jan. 1, also fueled growth in its overall member numbers to a total of 3.5 million insured, a 31% increase from the 2.7 million it covered as of March 2013.
WellCare saw net earnings reach $44.1 million in its first quarter compared with $21.5 million in the same quarter last year. Revenue rose 32% to $2.99 billion.
Looking ahead, WellCare raised its full-year projected earnings to the $4.40 to $4.75 a share range from its previous guidance of $3.75 to $4.05 a share. The increase resulted from its improved first quarter and what the company terms an improved outlook for its Medicaid Health Plans segment. The segment includes both its Medicaid Advantage plans and Medicare supplement insurance it acquired as a result of the Windsor buy.
Gross margin for its Medicaid Health Plans was 13.2% in the first quarter, up 90 basis points (0.9) from the first quarter of 2013. The insurer's first-quarter medical benefits ratio fell 80 basis points year over year. The first quarter 2014 segment medical-benefits ration decreased 80 basis points year over year.
First quarter 2014 Medicare Health Plans gross margin stood at 10.5%, a drop of 250 basis points compared with the first quarter of 2013. The decrease is attributable to lower premium rates, higher medical expenses and the implementation of an ACA industry fee, the company said.
First-quarter costs associated with hepatitis C soared more than 250% for the insurer “due to the introductions of new, expensive drugs,” the company said in a presentation that accompanied its earnings release. “WellCare anticipates that the expense will increase at a faster rate in the remaining nine months of the year, potentially offset in part by Medicaid program reimbursement,” according to the company presentation.Follow John N. Frank on Twitter: @MHJFrank