Health insurer WellPoint has partly attributed a 68 percent drop in net income in the fourth quarter of 2013 to consumers who used more services than expected out of fear that they would lose their plans under the reform law, according to a report from The Hill.
According to the insurer, higher utilization drove its benefit expense ratio up to 87.8 percent from 87.3 percent in the fourth quarter of 2012.
Originally, non-grandfathered policies — plans that went into effect or underwent certain changes after the Patient Protection and Affordable Care Act became law in March 2010 — had to meet new coverage requirements in 2014, and many insurers sent out cancelation notices to people in non-grandfathered plans that weren't compliant with the new criteria. However, President Barack Obama took executive action to allow insurers to continue offering health plans that aren't compliant with the PPACA this year.
Despite the decline in profits last quarter, WellPoint still expects to fare well under the PPACA. The insurer is offering plans through the state and federal exchanges and anticipates adding more than 1 million consumers this year, according to the report.
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WellPoint Q4 Profit Down 68%
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