{"id":440649,"date":"2010-03-17T12:27:22","date_gmt":"2010-03-17T16:27:22","guid":{"rendered":"http:\/\/blogs.wsj.com\/health\/2010\/03\/17\/wellpoint-spells-out-2010-outlook-using-a-lot-of-caveats\/"},"modified":"2010-03-17T12:27:22","modified_gmt":"2010-03-17T16:27:22","slug":"wellpoint-spells-out-2010-outlook-using-a-lot-of-caveats","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/440649","title":{"rendered":"WellPoint Spells Out 2010 Outlook, Using a Lot of Caveats"},"content":{"rendered":"

\"insure\"Remember that investors meeting that WellPoint had planned in Indianapolis last month? The one that was canceled when CEO Angela Braly was summoned before a congressional committee<\/a> to explain her company\u0092s requested 39% rate hike in California?<\/p>\n

Well, it resurfaced in the form of a 15-minute conference call this morning. Here\u0092s what happened:<\/p>\n

CFO Wayne DeVeydt forecast headwinds and told analysts that WellPoint expects to earn at least $6 a share this year. That would be a total of $2.6 billion, down 11% from last year\u0092s $2.9 billion. <\/p>\n

The caveat, which he mentioned a couple times, is that numbers are \u0093subject to our ability to secure and maintain sufficient premium rates,\u0094 according to a transcript of the call from Thomson Reuters. The premium increases the company asked for in California<\/a> are on hold while the regulator there reviews its filings.<\/p>\n

The other elephant in the room: The health overhaul. DeVeydt said his company\u0092s forecast doesn’t include the impact of changes in the health system. If the overhaul passes, most provisions of the legislation that would hurt an insurer\u0092s ability to hit its marks with Wall Street wouldn\u0092t take effect right away, so this forecast seems pretty secure in that regard.<\/p>\n

One more thing the Health Blog noted with interest. As of the first of this year, WellPoint decided to change the way it reports its benefit expense ratio, also called the medical loss ratio. The MLR is a metric closely watched by Wall Street and Washington as a gauge of how much companies spend on medical treatments versus administrative expenses and overhead. <\/p>\n

DeVeydt said that WellPoint is now reclassifying things like nurse hotlines and wellness programs for members as medical — rather than administrative — expenses. That boosts the MLR that the company expects this year to 84.3% from the 82.9% reported in 2009.<\/p>\n

What\u0092s interesting about the reclassification is that the bill the Senate passed Christmas Eve and that is being considered by the House would mandate that companies hit a 85% MLR for group business and an 80% MLR for individual business. It’s a lot easier to make those targets if expenses currently considered administrative are moved into the medical column.<\/p>\n

Image; iStockphoto<\/em><\/p>\n

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Remember that investors meeting that WellPoint had planned in Indianapolis last month? The one that was canceled when CEO Angela Braly was summoned before a congressional committee to explain her company\u0092s requested 39% rate hike in California? Well, it resurfaced in the form of a 15-minute conference call this morning. Here\u0092s what happened: CFO Wayne […]<\/p>\n","protected":false},"author":792,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-440649","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/440649","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/792"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=440649"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/440649\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=440649"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=440649"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=440649"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}