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WellPoint sees strong interest in exchange products

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WellPoint Inc. refused to give public exchange activity figures today, but Joseph Swedish, the chief executive, said he’s optimistic about the exchange program.

The individual health insurance sales call center at WellPoint (NYSE:WLP) received 35,000 calls during the first week of exchange operations, which is twice the usual call volume.

Call volume increased to 45,000 during the second week.

“We believe we see a lot of interest in exchange products,” Swedish said during the company’s third-quarter earnings call.

WellPoint is reporting $2.3 billion in net income for the third quarter on $53 billion in revenue, up from $2.2 billion in net income on $46 billion in revenue for the third quarter of 2012. Commercial plan enrollment fell about 2 percent, but an increase in government plan enrollment pushed total enrollment to 36 million, up from 33 million a year earlier.

The PPACA public exchanges opened their enrollment sites Oct. 1. Since then, some states-based exchanges and the U.S. Department of Health and Human Services’ federal exchange enrollment site have run into well-publicized technical problems.

WellPoint has been a major force behind the creation of the Patient Protection and Affordable Care Act (PPACA) exchange program, and analysts asked the company many questions about the program during the earnings call.

Executives said they will start to get “834 benefit enrollment” transaction data from state-based exchanges in November and hope to have something to say about exchange enrollment projections in January.

WellPoint hired “bubble staff” to prepare for problems with the start of exchange enrollment sites, and it knew the start of the exchanges could be a “lumpy experience,” Swedish said.

Also during the call, executives said:

  • The range of prices for similar products has been wider on many exchanges than in the off-exchange market 
  • The company has had better success with building the full cost of the new PPACA health insurance tax into commercial rates than into government plan rates
  • Underlying medical costs are up about 5.5 percent to 6.5 percent, which is lower than the company had expected
  • About half of the states in which the company runs Medicaid plans are taking PPACA Medicaid expansion money and that could help the company add about 400,000 Medicaid lives by the end of 2014

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