(Bloomberg) WellPoint Inc., the second-biggest U.S. medical insurer, added 500,000 new members since Obamacare enrollment began and said the systems early stumbles havent dimmed profit estimates, boosting the companys shares.
While the new members tend to be older and sicker than current enrollees, WellPoint priced its plans accordingly and isnt 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% decline in fourth-quarter net income.
Three million Americans had signed up for insurance under the 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 its 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% to $85.86 at 11:18 a.m. in New York trading on Wednesday, after earlier climbing 4.1% 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.
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