WellPoint profit rises to $299.9 million

Wednesday, July 28, 2004 | 10:48 a.m.

SUN STAFF AND WIRE REPORT

THOUSAND OAKS, Calif. -- WellPoint Health Networks Inc., which is in discussions to be acquired by Anthem Inc. to form the largest U.S. health insurer, Tuesday said second-quarter profit jumped 34 percent to $299.9 million.

Net income climbed to $1.86 a share, from $224.5 million, or $1.49, a year earlier, the Thousand Oaks-based company said in a statement. Revenue rose 17 percent to $5.8 billion.

WellPoint has been cutting costs by consolidating its businesses with Cobalt Corp., a Blue Cross insurer that it bought in September, and by getting doctors to file claims electronically rather than using paper forms.

The number of people WellPoint insures increased 9.5 percent to about 15.5 million people in the second quarter from 14.1 million in the year-ago quarter.

WellPoint and Indianapolis-based Anthem have been competing to sign up big employers for their benefits plans. Together, the companies will have Blue Cross and Blue Shield brand health services in 13 states.

Anthem said it would file a lawsuit challenging a ruling Friday by California Insurance Commissioner John Garamendi that blocked its proposed acquisition of WellPoint.

Garamendi said California policyholders probably would pay higher premiums as Anthem buys WellPoint. Shareholders from both companies and regulators in 10 states have approved the transaction.

Nevada was not among the states that had to approve the deal because neither Anthem nor WellPoint are based in Nevada. The Nevada Division of Insurance said it is monitoring the situation to make sure the deal does not increase costs and decrease benefits for the more than 126,000 Nevadans insured by the two companies.