WellCare’s Tampa headquarters were the target of a search by law enforcement and regulatory agents. News of the investigation led to the 77% decline of the company’s stock.
Clear Choice Health Plans announced that it will be entering the health insurance market in Montana in January, 2008. The company’s net income for the second quarter increased 139.3% to $2.3 million.
Physicians Healthcare Management Group, Inc. recently completed a first-round financing of $2.5 million in connection with its first HMO.
Health plan stocks decreased 2.9% for the month of October. Most valuation indicators decreased last month. Since eight of the fourteen plans reported earnings last month and most reported improved performance, it is reasonable to assume the 2.9% decrease in stock price was driven by a more pessimistic outlook. The broader market, measured by the S&P 500, improved by 1.5%.
Eight of the fourteen publicly-traded health plans announced earnings last month. Aetna’s net income increased, in part as a result of a decrease in the administrative expense ratio. AMERIGROUP Corporation experienced a 24.8% increase in membership, which led to an increase in operating income. Centene posted significant gains in net income and EPS, despite a slight decline in risk and fee membership. Coventry Health Care had strong growth in membership which led to an increase in net income. HealthSpring reported a decline in earnings as its health benefits ratio increased 4.5 percentage points. Humana experienced a 19.4% increase in Medicare Advantage revenues, which led to a significant growth in operating income. UnitedHealth Group’s operating income increased 13.2, due in part to a 10.5% increase in fee revenue. WellPoint, Inc.’s revenue increase and decline in shares outstanding helped drive up EPS 13.1%.
Molina Healthcare announced that on October 11th it completed its offering of $200 million of 3.75% convertible senior notes due 2014.
WellPoint, Inc. announced that it has organized into three new strategic business units and appointed Ken Goulet, Joan Herman, and Dijuana Lewis as presidents and CEOs of the respective units.
Universal American is expanding its Private Fee-for-Service coverage area.
This month we looked at Equity Capital Costs and determined that the strongest relationships with valuation indicators were with recent performance indicators. Performance improvement metrics had fewer significant relationships with the valuation indicators. Growth metrics had some significant relationships, while there were,rarely, significant relationships found for size metrics.
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