WellPoint Health Networks, Thousand Oaks, Calif., saw its profits jump 53% in the first quarter as it boosted membership and cut costs. Net income for the three months ended March 31 reached $295.2 million, or $1.85 per share, up from $193.1 million, or $1.29 per share, in the year-ago quarter. Analysts had projected an average of $1.58 per share. Revenue climbed 17% to $5.65 billion. Enrollment rose 8.3% year over year to 15.4 million members, partly because of the September 2003 acquisition of Cobalt Corp. The Blue Cross and Blue Shield insurer raised its full-year earnings outlook to $7.50 per share from a previous forecast of $7.10 per share. WellPoint is in the process of being acquired by Anthem in a $16 billion deal scheduled to close midyear.
Separately, Blue Cross and Blue Shield of Rhode Island is being urged by Gov. Don Carcieri to freeze contributions to its $300 million reserve fund for at least a year and to stop paying board members for their services. Carcieri said he also would press state regulators to more closely review future requests for rate increases from the not-for-profit insurer, which controls 70% of the state's commercial insurance market. The Rhode Island Blues has faced intense scrutiny in recent weeks for what critics have called lavish executive perks, high administrative costs and soaring premiums. Earlier this month, the company's CEO agreed to return half of a $600,000 company loan that was previously forgiven, and its board agreed to ban future loans to officers and to cut contributions to reserves in an effort to reduce future premiums. -- by Laura B. Benko