The Catch: WellPoint

"Negative in-group change" means that employers with WellPoint coverage either let employees go or took health benefits away from some of the employees still on their payroll.

"For 2012, we expect that in-group change will continue to be negative, although the amount of attrition has and should continue to moderate," Braly said.

The amount WellPoint spent on medical benefits during the quarter increased.

Claims costs were unusually, unexpectedly low in 2010. Claims costs more slowly than WellPoint expected in 2011 becuase enough to contribute to an increase in the ratio of benefits paid to revenue, Braly said.

Braly said another reason for the increase in the benefits ratio was the MLR provision in the Patient Protection and Affordable Care Act of 2010 (PPACA).

The PPACA MLR provision requires carriers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts. Carriers that let MLRs fall below the federal minimums are supposed to make up the difference by paying rebates to their customers or finding some other way to compensate the customers.

UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH), recently noted during its fourth-quarter earnings call that it would be paying out enough PPACA MLR rebates to affect its earnings, but it brushed aside an analyst's questions about just how much it might pay out.

Braly declined during the WellPoint earnings call to estimate WellPoint's rebate total, but she did answer an analyst's question about the matter.

WellPoint does not want to give an MLR rebate estimate because it has not seen the final version of the form that is supposed to go out to customers, and it is still not sure what exactly the rules will be or how big the rebates will be, Braly said.

CHILDREN'S COVERAGE SHOPPING SCHEDULE

EHealthInsurance, the unit of eHealth Inc., Mountain View, Calif. (NYSE:EHTH), that runs the eHealthInsurance.com website, has tried to help consumers, employers and others deal with the mess in the child-only health insurance market by compiling a state-by-state guide to child-only coverage enrollment schedules for 27 states and the District of Columbia.

PPACA drafters tried to increase children's access to coverage by requiring insurers to sell coverage to children on a guaranteed-issue basis.

PPACA does not limit the rates insurers can charge children for coverage, but some carriers have dropped child-only coverage altogether because of concerns that antiselection could force them to charge children exorbitant rates.

Some states have tried to reduce antiselection risk and keep child-only products available by creating pre-set "open enrollment" periods for child-only coverage, to reduce the likelihood that parents and guardians will pay for coverage for children only when the children are sick.

EHealth notes that some states still require carriers to sell child-only policies on a guaranteed-issue basis all year long, without the benefit of scheduled open enrollment periods. Those states include Maine, New Jersey, New York and Vermont.

Many other states schedule one or two open-enrollment months per year. In California, the open enrollment month for a child is the child's birth month.

YOUR STATE'S BIG 3

The Center for Consumer Information and Insurance Oversight (CCIIO), the arm of the U.S. Department of Health and Human Services (HHS) responsible for implementing PPACA, has published a list of the top 3 small group products by state to help states interpret an essential health benefits bulletin that was released in December 2011.

PPACA requires states to create essential health benefits packages. If PPACA takes effect as written and works as drafters expect, the packages will be used as the basis for efforts to make the plans to be sold through the new PPACA health insurance distribution exchanges easy to compare.

In the bulletin, HHS officials suggested that they would like each state to develop its own essential health benefits package. The officials recommend that a state base the package on the benefits offered by a benchmark plan, such as the state's 3 largest employee benefit plans or the "largest plan by enrollment in any of the 3 largest small group insurance products in the state's small group market."

The CCIIO top 3 small group products list includes some plans that are closed to new enrollees but still active as well as plans that are open to new enrollees. The list excludes association plans and products that are not major medical plans.

For Alaska, for example, the CCIIO lists two small group preferred provider organization plans sold by Premera Blue Cross Blue Shield of Alaska and one sold by John Alden Life Insurance Company.