Wed, Jan 29 2014
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:
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 healthcare.gov 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.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.