IBJNews

Investors await progress report from WellPoint

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based WellPoint Inc. becomes the second big health insurer to tell investors how it has fared so far in 2013 when it reports first quarter results Wednesday.

Competitor UnitedHealth Group Inc. started insurer earnings reports with a thud Thursday, when it said its first quarter earnings sank 14 percent. That was largely because of a lower gain recorded due to leftover insurance claims. The bigger news for investors what that UnitedHealth said it may have to rethink its expectation for earnings growth next year due to funding cuts for Medicare Advantage plans.

UnitedHealth is the largest provider of Medicare Advantage plans, which are subsidized, privately run versions of the federal government's Medicare program for the elderly and disabled people. Earlier this month, the Centers for Medicare and Medicaid Services released data that points to a rate reduction of 4 percent, something that worries insurers since costs are expected to head the opposite way and climb about 3 percent.

Medicare Advantage plans play a smaller role in WellPoint's business, but the rates are a relevant topic for the insurer, which gained about 165,000 Medicare Advantage customers last year when it integrated CareMore Health Group.

WellPoint has said it will spend roughly $300 million this year preparing for next year's health care overhaul coverage expansions and changes to its Medicare Advantage business. On Wednesday, investors will be looking for updates on the insurer's progress. They expect the overhaul's coverage expansions to affect WellPoint more than other insurers because the company derives a large portion of its business from the individual market and through smaller employers who cover their workers.

The overhaul aims to help millions of people buy health care coverage, and it will take a big step toward that goal this fall, when state-based insurance exchanges begin operating to sell policies to individuals and people with coverage through a small employer. Income-based tax credits are expected to help many people buy coverage.

WellPoint and other insurers are preparing to sell policies on those exchanges and, in some cases, to keep business they could lose once their customers have the option of an exchange. Currently, it can be difficult for individual insurance customers to switch insurers, especially if they have a costly medical condition.

On Wednesday, WellPoint also will continue to introduce new CEO, Joseph Swedish, to analysts. The insurer picked Swedish, a veteran hospital executive, in February, more than five months after former CEO Angela Braly resigned. Swedish started at the end of WellPoint's quarter.

WellPoint is the second-largest health insurer after UnitedHealth. It runs Blue Cross Blue Shield plans in 14 states, including California, New York and Ohio and covers more than 36 million people.

Analysts expect, on average, earnings of $2.38 per share on $17.86 billion in revenue.

In last year's first quarter, WellPoint earnings fell almost 8 percent, to $856.5 million, or $2.53 per share, as enrollment slipped and the cost of medical care rose. Operating revenue, which excludes investment gains, climbed 3.4 percent, to $15.15 billion.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  2. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

  3. Good try, Mr. Irwin, but I think we all know the primary motivation for pursuing legal action against the BMV is the HUGE FEES you and your firm expect to receive from the same people you claim to be helping ~ taxpayers! Almost all class action lawsuits end up with the victim receiving a pittance and the lawyers receiving a windfall.

  4. Fix the home life. We're not paying for your child to color, learn letters, numbers and possible self control. YOU raise your children...figure it out! We did. Then they'll do fine in elementary school. Weed out the idiots in public schools, send them well behaved kids (no one expects perfection) and watch what happens! Oh, and pray. A mom.

  5. To clarify, the system Cincinnati building is just a streetcar line which is the cheapest option for rail when you consider light rail (Denver, Portland, and Seattle.) The system (streetcar) that Cincy is building is for a downtown, not a city wide thing. With that said, I think the bus plan make sense and something I shouted to the rooftops about. Most cities with low density and low finances will opt for BRT as it makes more financial and logistical sense. If that route grows and finances are in place, then converting the line to a light rail system is easy as you already have the protected lanes in place. I do think however that Indy should build a streetcar system to connect different areas of downtown. This is the same thing that Tucson, Cincy, Kenosha WI, Portland, and Seattle have done. This allows for easy connections to downtown POI, and allows for more dense growth. Connecting the stadiums to the zoo, convention center, future transit center, and the mall would be one streetcar line that makes sense.

ADVERTISEMENT