Health insurer WellPoint Inc. said Wednesday its fourth-quarter profit soared largely due to a one-time gain from the sale of its NextRx subsidiary, though revenue fell on a dip in fully insured customers.
The Indianapolis insurer earned $2.74 billion, or $5.95 per share, in the three months that ended Dec. 31. That’s up from $331.4 million, or 65 cents per share, in the same period of 2008. The sale of NextRx to Express Scripts Inc. added $4.79 to the results. Without that, adjusted earnings were $1.16 per share.
Operating revenue was $15.06 billion, down 2.4 percent from $15.43 billion the same period in 2008.
Analysts surveyed by Thomson Reuters forecast a profit of $1.02 per share, on $15.13 billion in revenue.
WellPoint is the largest commercial health insurer based on membership. It operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others.
The recession and high unemployment continued to weigh on WellPoint during the quarter as medical enrollment decreased 3.9 percent to about 33.7 million members. Medical expenses also rose during the quarter to a benefit-expense-ratio of 84.8 percent from 83.4 percent, a year prior.
The high unemployment rate has increased expenses because it bumps up the number of people who chose to continue their employer-based health insurance under the federal law known as COBRA after they leave their jobs.
Insurers say people who continue their coverage through COBRA typically do so because they need it to cover ongoing health conditions. Federal subsidies have made it easier for people to afford COBRA plans.
For the full year, the company earned $4.75 billion, or $9.88 per share, up from profit of $2.49 billion, or $4.76 per share in 2008. Excluding gains from the NextRx sale, the company earned $6.09 per share. Operating revenue fell 1.2 percent to $60.83 billion from $61.58 billion.
Looking ahead, the company expects profit of at least $6 per share in 2010, while analysts expect about $6.11 in profit.
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