WellPoint Health Reports Slight Dip in Earnings

WellPoint Health Networks Inc., the managed health care company spun off by Blue Cross of California last year, reported a 2% drop in earnings in the third quarter.

Net income in the quarter that ended Sept. 30 was $49.8 million, down from $51 million in the same three-month period a year earlier. Revenues in the third quarter rose 11% to $698 million from $629 million a year earlier.

For the first nine months of the year, Woodland Hills-based WellPoint reported earnings of $161 million on revenue of $2.07 billion, compared with year-earlier profit of $115 million on $1.82 billion in revenue. Financial results prior to Feb. 1, 1993, are presented as if WellPoint had been operating as a separate, stand-alone entity.

Last year, Blue Cross spun off most of its nonprofit health insurance programs into a for-profit subsidiary, WellPoint. Blue Cross retained an 80% ownership stake in WellPoint, and state regulators required Blue Cross to submit a plan by which it would compensate the public for the tax-exempt status it had enjoyed while it built its insurance business.

Blue Cross unveiled the so-called public benefit plan Sept. 15, promising to create a new public charity with assets of more than $2 billion to fund health programs throughout the state. That plan is being reviewed by state regulators.