Health insurer WellPoint Inc., parent of Anthem Blue Cross of Connecticut, said Wednesday its fourth-quarter profit soared on a one-time gain from the sale of its NextRx subsidiary, but enrollment and revenue took another recession-driven hit.
The Indianapolis insurer said its total enrollment fell 3.9 percent to 33.7 million people compared to 2008, with small businesses delivering the most significant drop. Enrollment in WellPoint’s local group business — which is largely employer-sponsored insurance for small companies — sank 5.9 percent due mainly to rising unemployment.
Insurers have struggled with enrollment losses during the recession as employers have cut jobs and reduced the number of people covered by their health insurance. WellPoint competitor UnitedHealth Group Inc. also reported an enrollment drop but said it expects the loss to slow this year.
WellPoint’s enrollment fell only a half percent compared to the third quarter of 2009, and the insurer said it has already added more than 400,000 new members through its national account business as of Jan. 1.
National accounts involves big companies that provide their own insurance while WellPoint administers the plans. These are less profitable for the insurer than business where it also provides the insurance.
WellPoint earned $2.74 billion, or $5.95 per share, in the three months that ended Dec. 31. That’s up from $331.4 million, or 65 cents per share, in the same period of 2008. The sale of NextRx to Express Scripts Inc. added $4.79 to the results. Without that, adjusted earnings were $1.16 per share.
Operating revenue was $15.06 billion, down 2.4 percent from $15.43 billion the same period in 2008. Premiums, the biggest part of revenue, fell 2 percent to $13.9 billion.
Analysts surveyed by Thomson Reuters forecast a profit of $1.02 per share, on $15.13 billion in revenue.
WellPoint’s results support UnitedHealth’s fourth-quarter theme of “stabilization in industry trends,” Goldman Sachs analyst Matthew Borsch said in a research note.
WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others. (AP)
