(Bloomberg) –WellPoint Inc. (NYSE:WLP), the second-biggest U.S. health insurer, has added 500,000 new members since the Patient Protection and Affordable Care Act exchange enrollment season began Oct. 1.
Joseph Swedish, the company’s chief executive officer, said exchange plan enrollment has been “very consistent with our expectations,” in spite of technical problems and administrative problems at both the exchanges run by the U.S. Department of Health and Human Services (HHS) and at the state-based exchanges.
Swedish talked about the exchanges today during a conference call with securities analysts.
WellPoint held the call to review its earnings for the fourth quarter of 2013.
The company is reporting $148 million in net income for the quarter on $18 billion in revenue, compared with $464 million in net income on $15 billion in revenue for the fourth quarter of 2012.
WellPoint said enrollees used more care than usual in late 2013, while plans written under the old, pre-PPACA rules were still in effect.
The increase in medical cost and a $161 million loss on the sale of two retail eyewear businesses hurt earnings.
A year ago, a one-time income tax settlement helped earnings, the company said.
Excluding one-time items, earnings were in line with securities analysts’ forecasts.
WellPoint said it still expects to earn more than $8 per share in profits this year.
The price of WellPoint share rose 1.9 percent, to $85.86 at 11:18 a.m. in New York trading. Earlier, the price climbed 4.1 percent. Investors have given the stock its biggest intraday increase in nine months.
The new exchange plan members tend to be older and sicker than “legacy individual customers,” but WellPoint priced its plans accordingly, Swedish said.
HHS has reported that only about one-quarter of the 3 million enrollees in the exchanges’ private “qualified health plans” (QHPs) have been younger than 35, raising concern that the cost of the enrollees might be unsustainable.
Swedish said he feels good about the risk pool demographics the company has seen so far.
“We are encouraged by the level of applications we received,” Swedish said.
The exchange open enrollment period is set to end March 31. To apply for 2014 QHP coverage after that date, consumers may have to show that they qualify for a special enrollment period.
Application activity spiked in December, before the plan selection deadline for coverage that started Jan. 1, and WellPoint expects to see another spike in March, Swedish said.
Originally, WellPoint feared small employers would dump employees into the individual exchanges.
“We now believe this risk appears lower for 2014 than we originally anticipated,” Swedish said.
–Editors: Bruce Rule, Reg Gale
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