INDIANAPOLIS – WellPoint Inc.s third-quarter earnings fell 5 percent but still topped expectations, and the nations second-largest health insurer said it raised its 2013 forecast despite added expenses from the health care overhaul.
The Blue Cross Blue Shield insurer said Wednesday that its performance this year helped prompt it to raise its expectation for 2013 adjusted earnings to at least $8.40 per share. Thats up from its previous forecast for at least $8 per share and well beyond the $8.26 per share average that analysts surveyed by FactSet expect.
Company executives told analysts they are doing this despite making sizeable investments to get ready for upcoming coverage expansions under the overhaul.
The law aims to provide health insurance coverage to millions of uninsured people, and it took a major step toward that goal Oct. 1, when enrollment started for coverage that begins in January.
The overhaul calls for an expansion of the state-federal Medicaid program and also provides income-based tax credits to help people buy coverage on health insurance exchanges set up in each state.
WellPoint sells coverage on several of these exchanges. Chief Financial Officer Wayne DeVeydt said WellPoint has spent about $300 million to prepare for the exchanges, and it expects to spend another $70 million to $100 million on marketing for the coverage it sells on them.
The overhauls coverage expansion will affect WellPoint more than other insurers because the company derives a large portion of its business from the individual market and through smaller employers who cover their workers.
Investors havent been sure how much of this business WellPoint will lose or gain because of these exchanges.
Theyll have to wait for clarity on that. Computer glitches tied to the largely online exchanges have frustrated consumers in many states as they have tried to shop around for coverage.
DeVeydt said the insurer has enrolled people through the exchanges, but the company doesnt have a clear picture yet on how many because it hasnt received all the paperwork for those customers.