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Health Net Soars on ObamaCare

Health Net Inc. shares shot up nearly 10 percent on Wednesday after the company reported higher first-quarter profits and revenue largely driven by new ObamaCare enrollees. The Woodland Hills insurer reported net income of $28.8 million (36 cents a share) compared to $19.8 million (25 cents) for the same quarter a year ago. Revenues increased 10.8 percent to $3 billion. Analysts on average expected net income of 42 cents a share on revenue of $3.3 billion, according to Thomson Financial Network. The company credited its performance to sales of new policies with the start of national health reform, formally called the Affordable Care Act or ACA. “Our first quarter performance demonstrated substantial commercial and Medicaid enrollment momentum thanks primarily to new ACA-related programs,” said Chief Executive Jay Gellert, in a statement. “We believe our Medicaid enrollment gains from ACA-driven expansion will continue throughout 2014, with approximately 120,000 incremental members in the last three quarters of this year.” In the race to sign up new customers on the Covered California health insurance exchange, Health Net emerged in third place behind Anthem Blue Cross and Blue Shield of Caifornia. Anthem signed up 425,058 people, or 30.5 percent of all policies sold on the exchange through April 15, while Blue Shield signed up 381,457 policies for a 27.3 percent market share. Health Net had an 18.9 percent share but still gathered 264,079 policyholders. Shares closed up $3.35, or 9.8 percent, to $37.41 on the Nasdaq.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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