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Originally Posted by dippin
Well, yes. But as I said, profit margins are far from being adequate representations in a sector where "costs" can be messed around with. Return on equity would be a much better indicator of actual profitability, but that would make these companies look even worse, so I'm guessing they are fine with whatever fumbling of the numbers people do as long as they are using the profit margin as an indicator.
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I did some looking at Well Point, note the last paragraph quoting the CEO regarding enrollment:
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Total operating revenues for the quarter came in at approximately $15.1 billion as opposed to $15.4 billion in the year-ago quarter. The decrease was primarily attributable to lower fully insured enrollment in 2009, partially offset by the rise in premium rate. Total operating revenues for 2009 came in at approximately $60.83 billion as opposed to $61.58 billion in 2008.
Operating gains for the Commercial Business segment decreased 56.5% to $316.8 million in the reported quarter. The decline was due to restructuring costs incurred by WellPoint in addition to a reduction in fully insured enrollment and an increase in the benefit expense ratio for the Local Group business. Operating gains for the Consumer Business segment fell 32.6% to $158.9 million in the quarter. The Other segment reported a 15.7% year-over-year increase in operating gains.
The health insurer completed the sale of NextRx subsidiaries to Express Scripts, Inc (ESRX) on Dec 1, 2009 and received consideration of $4.7 billion from the transaction and recognized a pre-tax gain on the sale totaling $3.8 billion in the reported quarter.
We were disappointed to see a significant decline in medical enrollment. Medical membership came in at 33.7 million as of Dec 31, 2009, which represented a decrease of 3.9 % from Dec 31, 2008. Medical expenses also climbed during the quarter to a benefit-expense-ratio of 84.8% from 83.4% in the year-ago quarter.
The membership decline was most significant in the Local Group business, which saw a 989,000 member decline from the prior-year period. The decrease in membership in this segment was primarily attributable to lapses and in-group enrollment losses arising from the recession and the consequent rise in unemployment.
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(WLP) WellPoint Beats Consensus Earnings Estimates | Stock Blog Hub
The point of this is to illustrate there is a lot of stuff going on within this company having an effect on financial results. Isn't kinda foolish or dishonest to come to superficial or political conclusions without actually digging into the numbers?