Jan. 29 (Bloomberg) --WellPoint Inc., the second-biggest U.S. medical insurer, added 500,000 new members since Obamacare enrollment began and said the system’s early stumbles haven’t dimmed profit estimates, boosting the company’s shares.
While the new members tend to be older and sicker than current enrollees, WellPoint priced its plans accordingly and isn’t backing off of projected profit margins, Chief Executive Officer Joseph Swedish told analysts on a conference call today. The prognosis helped WellPoint shares overcome a 68 percent decline in fourth-quarter net income.
Three million Americans had signed up for insurance under the Patient Protection and Affordable Care Act as of last week, overcoming technical disruptions and delays that hamstrung enrollment in October and November. Only about a quarter were younger than 35, raising concern that medical costs for the new coverage would be unsustainable.
While it’s still early, enrollment so far is “very consistent with our expectations,” Swedish said on a conference call. “We are encouraged by the level of applications we received” and the demographics of the “risk pool.”
The insurer reiterated that 2014 profit is expected to be more than $8 a share.
WellPoint rose 1.9 percent to $85.86 at 11:18 a.m. in New York trading, after earlier climbing 4.1 percent for its biggest intraday increase in nine months.
The company also said it saw “higher utilization” in advance of Jan. 1, when new insurance plans required by the health law took effect. Higher medical costs, along with a $160.7 million loss on the sale of two retail eyewear businesses, helped send earnings down in the quarter, WellPoint said in a statement today. Earnings excluding one-time items still met the average analyst estimate.
--Editors: Bruce Rule, Reg Gale