WellPoint’s earnings, revenue climb

WellPoint, Indianapolis, the nation’s largest health insurer, reported a 26% jump in 2006 profits despite higher-than-anticipated medical costs. Net income for the year reached $3.09 billion, or $4.82 per share, up from $2.46 billion, or $3.94 per share, in 2005. Revenue rose 28% to $51.97 billion. In the fourth quarter, net income rose 23% to $801.1 million, or $1.28 per share. Revenue increased 29% to $14.56 billion. The company’s medical-cost ratio, or the percentage of revenue spent on claims, was 81.1% in the fourth quarter, up from 79.7% a year earlier and higher than the 80.5% it had projected. The 2006 results reflect the addition of WellChoice, New York, which WellPoint acquired at the end of December 2005. WellPoint’s total enrollment climbed 1.4% in 2006 to 31.4 million members, excluding 222,000 members from a Puerto Rico joint venture in which the company reduced its stake. It also enrolled 1.6 million members in its stand-alone Medicare prescription-drug plans last year. For 2007, WellPoint forecast earnings of $5.53 per share, operating revenue of $61.9 billion and membership growth of 4% to 35.5 million members. -- by Laura B. Benko