Payers' Optimism Tempered By Economic Realities
Q2 Profit: +5.5%
Analyst expectations: Higher
Organic growth and the acquisition of two Florida health plans helped increase Medicare Advantage participation by 340,000 seniors through the first half of 2012, the company says. UnitedHealth acquired Medica HealthCare Plans and Preferred Care Partners; several primary care centers and two medical centers were also included in the deal.
Medicaid represents a growth market, with 275,000 beneficiaries added during the first six months of 2012. New and expanded contracts in Ohio, Kansas, Louisiana, Texas, and Washington contributed to the increase.
UnitedHealth officials made it clear that while they want to continue to expand their Medicaid business, they need to know that states are committed to running viable programs. Stephen Hemsley, the CEO of UnitedHealth Group, said the giant insurer will withdraw its products or reposition its programs if state commitments weaken.
Q2 Profit: -8.3%
Analyst expectations: Lower
WellPoint continues to take steps to diversify its revenue stream.
The Amerigroup acquisition, announced in July, will add 19 states and 4.5 million members to its Medicaid footprint. It will also enhance WellPoint's ability to serve the dual eligibles market and capitalize on the emerging long-term services market.
The acquisition of 1-800 CONTACTS provides WellPoint with direct-to-consumer expertise as well as the opportunity to expand into a growing business segment. The contact lenses provider has more than three million active customers.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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