WellPoint, the nation's largest health insurer by membership, saw continued erosion in its employer-sponsored plans in the third quarter but still beat analysts' estimates. Profit fell 11% in the quarter, and the Indianapolis-based company shed 1.5 million members over the past year. WellPoint had 33.9 million members as of Sept. 30.
WellPoint sees decline in profits, membership
Membership losses were largest among local group business, with a 966,000-member loss over the past year. Membership also declined in Medicaid, Medicare and individual plans, but national business grew by 43,000 people. The membership losses were largely blamed on the continued recession and ongoing layoffs nationally.
“We are performing well as an organization in a difficult economic environment,” Angela Braly, WellPoint president and CEO, told investors, adding that higher COBRA membership and flu activity are causing higher medical utilization, and will likely affect the bottom line in the fourth quarter.
Net income fell to $730.2 million in the third quarter, down from $820.7 million a year ago, while operating revenue was $15.2 billion, a decrease of 0.7% over a year ago, but still better than analysts expected. Premium pricing and reorganization of Medicaid and Medicare contracts helped boost revenue, company officials said.
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