WellPoint was hit by investment losses and rising unemployment in the fourth quarter of 2008, with net income falling by 61%. The nations largest health insurer by membership reported net income of $331.4 million in the fourth quarter, compared with $859 million in the year-ago period.
Year-end net income fell by more than 25% to nearly $2.5 billion, down from $3.3 billion in 2007.
The Indianapolis-based insurer shed 288,000 members in the fourth quarter, including 148,000 in employer-sponsored groups. Overall, enrollment totaled 35 million for 2008, up from 34.8 million the year prior, but still below projections issued last fall.
Premium rate increases drove slight operating revenue gains. WellPoint posted fourth-quarter operating revenue of $15.4 billion, up from $15.3 billion the year prior. Medicare Advantage products also contributed to the revenue gains, the company said. Investment losses totaled $543.2 million in the fourth quarter.
WellPoint earlier this month said it would cut 1,500 jobs. The company said it would discuss its 2009 outlook next month. This environment places an even greater burden on managed-care organizations to positively impact both the cost and quality of healthcare, said Angela Braly, president and chief executive officer of WellPoint, on an investor call.