WellPoint Sees 1%-3% 2009 Adjusted EPS Growth

WellPoint Inc. (WLP) expects adjusted per-share earnings to grow by 1% to 3% this year, Chief Executive Angela Braly said Tuesday, noting that consolidated membership and earnings results as of last month were encouraging and in line with expectations.

The managed-care giant offered its look at 2009 during its investor conference, being carried over the Internet. The company's outlook for modest growth over 2008 adjusted earnings of $5.48 a share includes an assumption of 10% unemployment by year end and is in line with its previous forecast for low-single-digit percentage EPS growth this year.

WellPoint last month posted a sharp decline in fourth-quarter earnings as the company was hit by steep investment losses and client layoffs that softened enrollment. Managed-care companies in general struggled last year with commercial-plan membership, pricing, higher costs, enrollment attrition and investment losses.

WellPoint believes that competitors' pricing "had an impact" on the company last year, Braly said, although she said that "overall we think that the competition is rational."

WellPoint has become a more agile company and is well-positioned for tough economic times, the CEO said.

The company continues to work to resolve issues that led the government to temporarily ban the managed-care concern from marketing and enrolling seniors in its Medicare health and prescription-drug plans, Braly told investors.

While Medicare Advantage plans constitute a small part of WellPoint's business, it's important to the company to be able to continue to enroll members in them, said Braly.

WellPoint continues to work with the Centers for Medicare and Medicaid Services to "remediate any compliance issues that they raised," she said.

CMS last month suspended WellPoint's marketing of and enrollment of seniors in Medicare Advantage and so-called Part D drug plans until the company completes remediation efforts. At the time, WellPoint said it was surprised by the move, as the company had been working with the agency for months to resolve problems.

Beneficiaries already enrolled in WellPoint's Medicare plans are not affected by the sanctions, and the company said it will continue to market its Medicare supplement products.

Federal officials, in a letter, said the company's "persistent failure" to comply with requirements had started to pose a serious threat to beneficiaries' health and safety, the Wall Street Journal noted at the time. Computer problems caused the company to deny coverage for medications and cancel benefits for thousands of beneficiaries, CMS said.

CMS, part of the U.S. Department of Health and Human Services, took similar action last week against WellCare Health Plans Inc. (WCG), which derives at least half its revenue from Medicare.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; [e-mail]