WellPoint And RightCHOICE Report Higher Net Income

WellPoint agreed Oct. 18 to acquire RightCHOICE for cash and stock with a total value of about $1.3 billion.

WellPoint gave membership growth and cuts in administrative costs credit for its earnings growth, while RightCHOICE attributed the improvement in its results to growth in commercial enrollment, cost savings, and success at increasing premiums enough to cope with increases in claims costs.

WellPoint and RightCHOICE provide major medical coverage for some employers but simply administer employer-funded plans for other employers. Revenue from providing coverage is usually much higher than revenue from providing administrative services only.

WellPoint increased insured membership 25%, to 6.5 million; ASO membership, 36%, to 3.4 million; and total membership, 29%, to 10 million. Average revenue per insured member increased 11%, to $62.

At RightCHOICE, insured membership held steady at about 546,000; self-funded membership increased 9%, to 1.4 million; and total membership increased 5%, to 2.8 million. Average revenue per insured member increased 10%, to $485.