Indianapolis-based WellPoint Inc., the biggest U.S. health insurer by enrollment, canceled a Feb. 23 meeting with investors
because the company is preparing Congressional testimony over proposed premium increases in California.
The company’s previous earnings forecast of at least $6 a share for 2010 is now subject to the “ability to secure and maintain sufficient premium rates,” Wellpoint said in a statement Tuesday. The Indianapolis-based insurer said Feb. 13 it postponed the premium increases of as much as 39 percent by at least two months to allow California’s insurance commissioner to review the plan, after the proposal was criticized by state officials and the Obama administration.
While the company is “confident in our guidance,” the opposition to the premium increases “has added slight uncertainty, at least in terms of timing,” said Kristin Binns, a WellPoint spokeswoman, in a telephone interview today. “These premiums are actuarially sound and we feel confident these independent reviews are going to confirm that.”
Chief Executive Officer Angela Braly was called to testify Feb. 24 over the proposed increase, which may affect as many as 800,000 people, before a House of Representatives subcommittee led by California Democrat Henry Waxman. The company canceled the investor conference to give management time to prepare, Binns said. The company hasn’t determined which executives will attend the hearing.
WellPoint said previously that rising medical costs, the recession and shrinking enrollments are forcing increased fees.
Analysts had estimated 2010 adjusted profit of $6.12 in a Bloomberg survey. The company scheduled a conference call on March 17 to discuss its forecasts.
WellPoint rose $1.19, or 2 percent, to $59.33 in New York Stock Exchange composite trading on Feb. 12. Shares have gained 36 percent this year.