"Insurance Giant Raises Its Profit Forecast Amid Surging Obamacare Enrollment"
CREDIT: AP Photo/Michael Conroy
WellPoint, the insurance giant that encompasses the Anthem and Blue Cross Blue Shield brands, has raised its 2014 profit forecast after gaining more than a million new customers largely thanks to the Affordable Care Act.
According to WellPoint CEO Joseph Swedish, the company now expects more than $8.20 per share in net income versus the $8.00 per share it was originally expecting, “driven by growth of 1.0 to 1.3 million net new medical members and mid-single digit percent increases in both operating revenue and operating gain.” Swedish even mentions Obamacare marketplaces specifically as a source of continuing growth.
“While it is early in 2014, we are encouraged by results thus far across our businesses and we believe [Obamacare] Exchanges are tracking our general expectations,” Swedish said in a press release. “As such, we are raising our 2014 earnings outlook… Our updated outlook reflects solid growth in membership, revenue and operating earnings. Our outlook also remains prudent in light of the dynamic nature of the marketplace, and we believe this is a point from which we will grow in the future.”
WellPoint and its subsidiaries are selling policies in 14 states’ Obamacare marketplaces. Swedish has consistently been bullish about Obamacare enrollment — which surpassed five million private health plan signups earlier this week — both for this year and over the coming decade.
“Despite the near-term uncertainty, we believe exchanges will be growing as a big part of the market over time,” said Swedish in a January health care conference sponsored by JP Morgan. “We saw a sizable uptick at the end of December, concurrent with the first enrollment deadline. And we expect a similar bump in March, in front of the second primary enrollment deadline.”
Other insurance executives, including the CEOs of Aetna, Cigna, and west coast insurer Health Net, have expressed a similar sense of optimism.
The Congressional Budget Office (CBO) recently revised its projection for first-year private Obamacare enrollment from seven million to six million after Healthcare.gov’s disastrous launch. Thanks to an ongoing enrollment surge this month, the White House may achieve — or even exceed — the six million mark by the March 31 deadline for 2014 coverage.
CBO expects the private state and federal marketplaces to have more than 24 million customers by the end of the decade.