VIRGINIA BEACH, Va. (AP) — Amerigroup Corp., which runs Medicaid coverage in several states, said Wednesday that its net income dropped 28 percent in the second quarter as it paid out more in medical claims and dealt with higher expenses.
The company, which is being acquired by health insurer WellPoint Inc., reported net income of $32 million, or 63 cents per share, in the three months ended June 30. That's down from $44.3 million, or 83 cents per share, a year ago.
The results were below the 69 cents per share that analysts surveyed by FactSet forecast.
Amerigroup paid out $686 million in medical claims during the quarter. That's up from $618 million in the subsequent period. Total expenses increased to $2.18 billion from $1.46 billion.
Revenue rose 46 percent to $2.23 billion from $1.53 billion as premium revenue jumped 45.7 percent.
This topped the $2.19 billion Wall Street expected.
Membership climbed 23.6 percent to 512,000 members versus the first quarter. Amerigroup currently has about 2.7 million members in 13 states.
Amerigroup says that a rate increase was approved for New York last month, retroactive to April 1. The Virginia Beach, Va., company anticipates 6 cents per share being added to its third-quarter earnings for the retroactive part of the rate hike.
WellPoint's $4.46 billion buyout of Amerigroup, which was announced last month, is expected to close in 2013's first quarter.