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Wellpoint backpedals on previous forecast for double-digit Obamacare rate hikes

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What a difference five weeks make, back when Wellpoint (WLP) executive Ken Goulet told stock market analysts that premium increases for 2015 plans "will probably be in double-digit plus." But today in a conference call reported by Seeking Alpha, Wellpoint reported its latest earning report and it seemed to back off of its previous statement of raising insurance rates.

Wellpoint (WLP), one of the nation’s largest health insurance companies, added 1.3 million more subscribers across its government and commercial businesses thanks in large part to the Affordable Care Act. The company says it expects its medical enrollment to grow for the full year by 1.3 million to 1.4 million members, including more than 400,000 that came from government-run exchanges in the first quarter.

It gets better.

Joe Swedish, the Chief Executive Officer of Wellpoint (WLP) said, "We did notice the average age of applicants decreased and further we got into the open enrollment period, indicating that younger age applicants signed up later in the period." It was also considered significant that Goulet was not present for the conference, an indication WellPoint didn't care to deal with the issue and chose to downplay it.

Swedish welcomed the surge of young, last-minute enrollees, the biggest player in the health law’s insurance marketplaces on Wednesday, as it tempered its prediction for substantial, double-digit 2015 rate increases. Swedish may have also felt the political pressure not to increase rates so dramatically.

Wayne DeVeydt, WellPoint’s chief financial officer, said that the volume of last-minute enrollment "was not only substantial vs. our expectations, but we saw in each day’s applications the average age coming down in meaningful fashion."

In other words, the young are signing up in sufficient enough numbers as to bring down the cost of insuring the "uninsured."

Swedish called the health exchange enrollments a big success as he expounded on the number of "new" enrollees in health insurance. "Applications especially near the end of the quarter were robust. Our March 31 membership includes applications through February 15th and we have enrolled over 400,000 members," said Swedish.

"Through the entire open enrollment period which officially ended April 15th, we now expect to add more than 600,000 members from public exchanges," added Swedish. In addition, Swedish also talked about offline enrollments of over 100,000.

"We are also serving approximately 100,000 members in private exchanges, which represent a new option for employers and their employees to obtain health coverage. Taken together, our overall enrollment growth and our positioning in the exchanges represent tangible examples of how our commitment to driving value for our customers is resonating with employers, individuals and their families on a daily basis," added Swedish.

WellPoint is still analyzing the 1 million or so members who signed up for its new plans through the online portals as well as directly with the company and its Anthem Blue Cross divisions. But executives said repeatedly they were pleased with the mix of customers and with the prices they set for 2014.

"We think because we hit the sweet spot" in 2014 rates, said DeVeydt. He thought that there’ll be less volatility in pricing for "our members than there would be for others. DeVeydt dodged the question about the double-digit rates.

WellPoint also doesn’t know how many exchange plan members were previously uninsured, and it’s still analyzing how many of them had been WellPoint customers before, executives said. DeVeydt also said a good job market is also contributing. "It appears that the layoffs have substantially declined at large-group employers."


Seeking Alpha - Wellpoint conference call

Kaiser Health News - WellPoint Softens Forecast For Obamacare Rate Hikes