WellPoint says exchange enrollment ahead of plan
WellPoint made a big bet on Obamacare and early enrollment numbers indicate it's paying off, according to executives from the nation's second-largest insurer.
The company said 500,000 new individuals have enrolled in its plans, with the majority of them coming through the new health exchanges.
"We do feel good about what we've seen so far on the exchanges," CEO Joseph Swedish told analysts on the company's conference call, after its fourth-quarter earnings release. "Our applications are coming in better than we expected."
WellPoint reported a fourth-quarter net profit of $148.2 million, or 87 cents per share, excluding certain items, topping analysts' estimates. The company's operating revenue of $17.65 billion was below expectations. WellPoint reiterated its forecast for full-year 2014 earnings of at least $8.00 a share.
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Despite the botched start to the Affordable Care Act open enrollment period, executives said the volume of applications for private plans on the exchanges is tracking higher than they had anticipated, and the demographic mix is in line with their expectations.
"We anticipated that the average age of exchange customers would generally be older," Swedish said, "and our pricing assumptions for both on and off exchange products reflected this view."
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As the nation's largest provider of Blue Cross Blue Shield plans, WellPoint has long been the leading insurer in the individual health-plan market, and its experience may have given it an advantage with exchange plans.
While its exchange plan pricing for 2014 is 20 percent to 30 percent higher than its competitors, in markets like New York and California, WellPoint's subsidiaries garnered the top market share.
"We're seeing signs that our brand name and network quality are carrying more of an advantage in the market than we had expected," said Swedish, adding that 80 percent of its enrollees were not previously insured by WellPoint.
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WellPoint's ability to attract market share despite its higher prices, may bode negatively for insurers like Molina Healthcare, which used a lower pricing strategy to attract higher enrollment volume.
In California, one of the few states which provides insurer enrollment data, Molina saw roughly 3,000 exchange enrollees as of Dec. 31, representing less than 1 percent market share.
—By CNBC's Bertha Coombs. Follow her on Twitter: @berthacoombs.