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Portfolio > Alternative Investments > Private Equity

WellPoint to have 600,000 PPACA exchange enrollees

By Allison Bell

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Executives at WellPoint Inc. (NYSE:WLP) expect to have about 600,000 Patient Protection and Affordable Care Act (PPACA) exchange plan enrollees once all of the consumers now in the application pipeline flow in.

The company also has increased Medicaid enrollment by 121,000 and is serving 100,000 private exchange plan enrollees.

WellPoint ended the quarter providing or administering medical coverage for 37 million people, up from 36 million a year earlier. 

The company will have only about 2 percent of its 2014 enrollees in PPACA exchange plans, expanded Medicaid programs and private exchange plans.

But executives said the very first utilization indicators for the “qualified health plans” (QHPs) sold through the public exchanges look good.

The first PPACA individual QHP open enrollment period started Oct. 1 and was supposed to end March 31. Most states’ enrollment periods and broad enrollment period extensions have now ended.

WellPoint executives talked about early PPACA exchange experience today during a conference call with securities analysts. 

The company held the call to go over first-quarter earnings. The company is reporting $701 million in net income for the quarter on $18 billion in revenue, compared with $885 million in net income on $18 billion in revenue for the first quarter of 2013.

WellPoint Chief Executive Officer Joseph Swedish said the company assumed when it priced the QHP coverage that the exchange users would be older than typical commercial plan customers.

The average age of the QHP buyers decreases as the open enrollment period went on, Swedish said.

Consumers were more likely to buy cheaper bronze and silver plans than richer gold and platinum plans, and the product mix sold was in line with company expectations, Swedish said.

Swedish added that WellPoint’s reputation as a solid carrier seems to be helping the company more than marketers had expected.

“There are geographies where we believe we are gaining share despite lower-priced competition,” Swedish said.

Also during the call, Swedish took a question about pricing at the new nonprofit, member-owned “CO-OP” plans.

Because each CO-OP is unique, making generalizations is difficult, Swedish said.

“But I think it’s fair to say there are some CO-OPs where we do not understand the pricing,” Swedish said. “We don’t know how economically it will work for them as time progresses.”

The companies with very low prices may be expecting to get money from the PPACA “three R’s” risk management programs, but it does not look as if there is much money in the risk management program kitty to start with, and, under current rules, it looks as if the kitty will shrink over time, Swedish said. 

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