* WellCare's 3rd-qtr profit more than doubles
* Company raises 2017 earnings forecast
* Medicaid MBR improves to 86 percent
* Medicare enrollments jump 45 percent
* WellCare shares up 4 percent (Adds analyst comment and share price)
Oct 31 (Reuters) - Shares of WellCare Health Plans Inc hit a record high on Tuesday after the health insurer handily beat analysts' estimates for third-quarter profit, keeping costs in check at its Medicaid business and adding thousands of new members to its Medicare plans.
The Florida-based insurer's shares rose 4 percent in morning trading, hitting a high of $188.83.
WellCare's net income surged to $171.6 million in the quarter ended Sept. 30 from $68.6 million a year ago. Excluding one-time items, it earned $4.08 per share, topping analysts' average estimate of $1.91, according to Thomson Reuters I/B/E/S.
The results reflected WellCare's core operating strength, particularly in Medicaid, BMO Capital Markets analyst Matthew Borsch said, adding the magnitude of the earnings beat left him "almost speechless."
The bulk of WellCare's revenue is driven by serving low-income beneficiaries through the Medicaid business, in which the company reined in expenses and reported a lower medical benefits ratio (MBR) - a key measure of costs.
MBR is the amount WellCare spends on insurance claims out of the premiums it earns. The lower the MBR number, the better for the insurer.
WellCare's third-quarter Medicaid MBR improved to 86 percent from 87.4 percent a year ago, while memberships rose by about 290,000, boosted by new businesses in Arizona and Nebraska.
WellCare also benefited from higher memberships at its Medicare business, where enrollments rose 45 percent or by 154,000 members, helped by its acquisition of Universal America Corp.
Analysts have said the acquisition, which closed in April, will help WellCare expand in the higher-margin Medicare Advantage business.
Medicare Advantage, an alternative to the standard fee-for-service government-backed plans for senior citizens in which private insurers manage health benefits, is the fastest growing form of government healthcare, with a total enrollment of 18 million people last year.
WellCare said its revenue climbed nearly 23 percent to $4.40 billion in the quarter.
The company also raised its earnings forecast for 2017. It now expects adjusted earnings of $8.25 to $8.40 per share, up from an earlier forecast of $6.75 to $6.95.
WellCare also said it expects to record a premium deficiency reserve (PDR) related to its contract with the Illinois Department of Healthcare and Family Services in the fourth quarter, that will dent earnings by 56 to 65 cents per share.
Piper Jaffray analyst Sarah James said she was "surprised" at the scale of the PDR. "It gives us concern over the long term margin of the contract," she added. (Reporting by Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila and Sai Sachin Ravikumar)