With open enrollment coming to a close, public insurance exchanges are starting to look like they won't be the money-loser many have been girding for, at least for WellPoint's health plans.
The publicly-traded parent company of Blue Cross-licensed plans in 14 states is raising its 2014 financial outlook as early results from exchange enrollment come in.
WellPoint CEO Joseph Swedish said the company is now expecting earnings per share of greater than $8.20, stemming from organic growth of between 1 million and 1.3 million new members and "mid-single digit" percentage increases in operating revenue and operating gains.
"While it is early in 2014, we are encouraged by results thus far across our businesses and we believe exchanges are tracking our general expectations," Swedish said in a media release, just about a year after taking the helm of the company and moving to insurance from the Trinity Health system.
WellPoint's new projections have membership increasing to just under 37 million by the end of the year, about 22 million of them through self-funded plans and 15 million through fully-insured plans. Looking to 2018, Swedish sees the company having 40 million members in total.
If the company's 2014 outlook turns out to be correct, revenue will increase 4 percent, to $73 billion, with operating profits increasing by up to 5 percent, to $4.2 billion.
WellPoint is expecting its benefit expense ratio to improve as well, from 85.1 percent to 83.7 percent, while operating cash flow could shrink a bit, from $3.1 billion last year to at least $2.4 billion this year.
At the same time that they're projecting growth, Swedish said, the company's leaders are also trying to be "prudent in light of the dynamic nature of the marketplace."
WellPoint operates Blue Cross-licensed plans, mostly under the Anthem brand name, in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.
In the public exchanges, WellPoint plans are facing a range of competitors, although in one state, New Hampshire, Anthem is the sole option.
In California, Anthem Blue Cross is one of 11 insurers selling in Covered California across the state -- and it's struggling to maintain its pre-exchange individual market share of 47 percent, so far garnering 30 percent market share, according to a recent Kaiser Family Foundation analysis.
In Connecticut, Anthem Health Plans is one of just three individual insurers available through Access Health CT, and so far it's earned a 60 percent individual market share, more than its pre-exchange share of 45 percent, according to the Kaiser analysis.
In Nevada, WellPoint's Rocky Mountain Hospital and Medical Service had a pre-exchange individual market share of 34 percent, but so far has the lowest market share -- 12 percent -- of the four exchange insurers, with Nevada Health Co-Op claiming 37 percent, UnitedHealthcare 36 percent and St. Mary's Health Plans 12 percent.
Elsewhere, in both the individual and small business exchange markets, a lot of WellPoint plans are available -- mirroring the trend among fellow Blue Cross companies that are flooding federally-run exchanges especially.