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WellPoint Sell Expense Rises

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Angela Braly, the chairman of WellPoint Inc., expects a weak economy to continue to nip at the company’s commercial health insurance plan enrollment in the coming months.

Braly talked about the possible effects of the soft economy on commercial plan enrollment today during the company’s third-quarter earnings call.

WellPoint, Indianapolis (NYSE:WLP), is reporting $683 million in net income for the third quarter on $15 billion in operating revenue, compared with $739 million in net income on $14 billion in operating revenue for the third quarter of 2010.

Total medical membership increased 2.6%, to 34 million, with self-funded enrollment growing 4.7% and fully insured enrollment shrinking 0.3%.

Commercial enrollment grew 2.4%, to 28 million.

Behavioral health program enrollment grew 6%, to 25 million.

Spending on efforts to sell coverage did not skyrocket, but it did creep up 0.6%, to $403 million.

Although commercial enrollment grew, “in-group attrition” – reductions in employer head accounts – affected national account enrollment, and WellPoint is expecting to see further attrition in national account plans in the coming year, in part because the company is trying to take a “disciplined approach” to pricing national account renewals, Braly said.

In addition, because of the state of the economy, “we anticipate that in-group membership attrition will continue to pressure our enrollment in 2012,” Braly said. “Many employers are facing a challenging business outlook.”

Executives from UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), recently reported seeing pockets of unusual pricing activity, apparently in response to provisions of the Patient Protection and Affordable Care Act of 2010.

WellPoint is seeing what it believes to be rational pricing, especially in the market for fully insured coverage, WellPoint executives said.


CORRECTION: The performance of fully insured enrollment was described incorrectly in the original version of this article. Fully insured enrollment decreased 0.3%.