Humana, WellCare, Molina report strong Medicaid growth
Humana's first-quarter profit of $368 million beat analyst expectations but still dropped 22 percent from last year's first quarter of $473 million, partly due to marketing expenses and investments related to new products.
However, the Louisville, Kentucky-based insurer stuck by its 2014 outlook of $7.25 to $7.75 per share, according to its earnings report released today. That outlook takes into account higher-than-expected costs for new hepatitis C treatments as well as planned investments in clinical initiatives.
Humana also said it will add 435,000 people to Medicare Advantage plans this year. At the end of March, individual Medicare Advantage membership totaled 2,330,800, up 15.8 percent from the first quarter of 2013. Humana also saw a 76.8 percent year-over-year increase in state-based Medicaid plan membership.
WellCare Chairman and CEO Dave Gallitano attributed the financial gains to Medicaid growth. The insurer enrolled about 60,000 Medicaid beneficiaries during the first quarter thanks to program expansions under healthcare reform. The insurer also saw overall membership grow 31 percent year over year to 3.5 million people.
However, its 2014 first-quarter net income of $4.5 million fell way below the $29.9 million earned in the first quarter of 2013. The insurer cited the nondeductible ACA health insurer fee with lowering this year's first quarter earnings by about $16 million.
"While we have been investing in the infrastructure--staffing, training, technology--to be ready to accommodate the growth associated with the dual eligible programs and the Affordable Care Act, we have continued to improve the administrative efficiency of our existing business," Molina CEO Mario Molina, M.D., said in a statement.
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