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WellPoint joins UnitedHealth, Aetna in raising profit forecasts

Bloomberg, July 29, 2010

WellPoint Inc. became the third U.S. health insurer this month to increase its 2010 profit forecast, stirring investor concern that state and federal regulators may increase scrutiny of industry pricing. WellPoint’s earnings may be at least $6.30 a share this year, more than a prior forecast of at least $6, the Indianapolis-based insurer said in a statement today. WellPoint, the biggest U.S. health plan by enrollment, fell 3.7 percent in New York trading after Chief Financial Officer Wayne DeVeydt said the outlook was tempered by uncertainty over how the health-care law passed in March will affect results. WellPoint, UnitedHealth Group Inc. and Aetna Inc. all cited lower medical costs in raising forecasts, saying fewer people visited doctors and hospitals because of the recession. With profits growing, insurers can’t justify any rate increases or benefit cuts next year, said U.S. Representative Pete Stark,  a California Democrat.