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WellPoint Discloses Big Sign-Ups Through Health Exchanges

By Jay Hancock

January 29th, 2014, 1:49 PM

The biggest player in the Affordable Care Act’s online insurance marketplaces delivered encouraging news to Obamacare supporters Wednesday.

After weeks of uncertainty about how many people have been applying for coverage that started Jan. 1, their age spread and whether or not they’re paying premiums, WellPoint disclosed higher-than-expected early membership growth and said it expects to make money on the new enrollees. It’s the most substantial information so far on how a key part of the health law is working out.

“We do feel good about what we’ve seen thus far on the exchanges,” WellPoint CEO Joseph Swedish told stock analysts on a conference call to report 2013 financial results. “While it is early, we are encouraged by the level of applications we’ve received” as well as by the health-risk profiles of new members, he said.

WellPoint bosses also disclosed:

  • As of last week about 500,000 people had applied for individual policies, mostly through its Anthem Blue Cross plans. The company expects another surge in late March, when enrollment closes for most people.
  • Most are new members, not customers rolling over previous WellPoint insurance. What WellPoint doesn’t know is if they were previously uninsured or had coverage somewhere else.
  • More than four-fifths applied through the subsidized, often-troubled online portals run by states or the federal government. The others enrolled directly with the company.
  • Thanks to computer troubles, WellPoint is still processing applications this week for coverage effective Jan. 1.
  • Most applicants had paid the first month’s premium, “but we’re not at what I’ll call a vast majority yet,” said chief financial officer Wayne DeVeydt.
  • New members are older on average than the general population but not more so than expected. WellPoint priced its plans anticipating an older and presumably sicker mix, executives said.

You can read Seeking Alpha’s transcript of the call here.

It’s still very early in the game. But WellPoint’s disclosures were positive enough that one analyst asked why the company wasn’t increasing its profit forecast for 2014.

The chief dangers to plans sold through and other state insurance portals are that they’ll sign too few members, that members will be sicker than expected and that premium increases to cover their care will make the insurance unaffordable. Investors seemed to see little sign of such risks in WellPoint’s disclosures. The company’s stock popped by $2 a share — more than 2 percent — in early trading.

WellPoint is selling subsidized insurance through online sites in 14 states. Much of its membership comes from its headquarters state of California, where the marketplace rollout has gone better than elsewhere. On the other hand, many of its plans are being sold in states such as Georgia, Wisconsin, Indiana and Virginia, where Republican governors have resisted the ACA rollout. (Democratic Virginia Gov. Terry McAuliffe replaced Republican Bob McDonnell this month.)

Executives didn’t disclose which states their 500,000 applicants came from.

Long before exchange computer problems emerged in October, the Congressional Budget Office projected that 7 million people would gain coverage sold through the marketplaces in 2014.

Last week Marilyn Tavenner, head of the Centers for Medicare and Medicaid Services, said 3 million had applied so far for exchange policies.

7 Responses to “WellPoint Discloses Big Sign-Ups Through Health Exchanges”

  1. JJ says:

    What carrier could not make some money, the deductibles are so high, the family out of pockets over $12,700, Sign me up Scotty.

    Obama is a liar. He knows it. What else is a lie from his government.

  2. Yaz says:

    Lies, lies and more lies! Off your meds again? Don’t you tea party freaks ever get tired of yourselves? Like the nitwit that nobody ever invites to family gatherings.

  3. jc says:

    JJ seems to think that there is only one type of plan being sold on the exchange (apparently, he thinks it’s a high-deductable plan, which is the kind conservatives have touted as a solution to fast-increasing health costs).
    He’s wrong, but he demonstrates a very important tenet of the tea party organization: Actual knowledge is not as important as ideological purity.

  4. JSY says:

    Those who criticized PPACA have not compared the new plan costs/benefits to the consumers with the ones before. Who is a bigger liar — A president who aims to provide an improved healthcare scheme to the community with a careless mistake of overlooking the reaction from insurers who could exercise their legal rights to cancel the existing policies; Or a president who declared an unjustified war with no valid reason and sent our youths to danger — who either lost their lives (tens of thousands) or came back wounded for the rest of their lives?

  5. killroy71 says:

    Here’s the reality – you’re all correct. Some people will pay more, some people will pay less. THere’s no one-size-fits-all description of ACA, it’s like the folktale of 9 blind men describing a elephant based on what part they have hold of.

    As to profitability, it won’t matter how many people sign up or what the deductible, each insurer has to spend at least 80 cents on the dollar toward care. what you should be worried about is the high cost of care that means even at these deductibles, wellpoint WILL meet this standard.

  6. Jeff Okey says:

    The JJs of the world need to purge themselves of all that bile and rhetoric and deal with the truth: that they are wrong and the majority are sick of them, even those in their own party. It’s time for the teabaggers to take a hike or get onboard with mainstream society. We are all interconnected. No man is an island.

  7. Pat says:

    So, which part of the elephant do you have hold of, huh? Should I venture a guess?