WellPoint Inc. (NYSE:WLP) did not use the terms “rebate” or “medical loss ratio” in its latest earnings release.
WellPoint, Indianapolis, is reporting $857 million in net income for the first quarter on $15.4 billion in revenue, compared with $927 million in net income on $14.9 billion in revenue for the first quarter of 2011.
The company ended the quarter providing or administering medical coverage for 34 million people, down 1.7% from the number it was covering a year earlier.
Enrollment in small, “local group” commercial plans and large, “national account” commercial plans fell 3%, to a about 22 million.
Enrollment in multistate BlueCard plans, which give enrollees in commercial group plans access to a national network, increased 1.4%, to 5 million.
Enrollment in individual commercial programs increased 0.3%, to $1.9 million.
WellPoint says it gave up much of the commercial business voluntarily, by repositioning products in the New York small group market and increasing some national accounts’ administrative fees.
“Enrollment was also impacted by in-group membership attrition and competitive situations in certain local group markets,” the company says.
The Patient Protection and Affordable Care Act of 2010 (PPACA) now requires health insurers to spend 85% of large group premiums and 80% of individual and small group premiums on health care and quality improvement efforts or else pay customers rebates.
Most health insurers seem to be shying away from saying much about rebates. UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), recently said it was getting a $130 million gain from rebate calculation changes, but it said little else about rebates and rebate calculations.
During a conference call, WellPoint Chairman Angela Braly did mention the PPACA minimum medical loss ratio (MLR) requirements briefly in her introductory remarks.
The minimum MLR requirements did contribute to a modest increase in the commercial plans’ MLR, and tough competition was another challenge, Braly said.
“While the overall competitive environment remains rational, we have lowered our year-end 2012 fully insured membership expectation as we maintain pricing discipline,” Braly said.
Later, while answering analysts’ questions, WellPoint executives said the company is operating based on the assumption that PPACA is the law of the land. The company said it has been adjusting rebate estimates all along and is not going to announce the kind of unlocking of rebate money that UnitedHealth has announced.
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