Managed health-care company Amerigroup Corp. reported a 43 percent drop in net income as health-care benefits expenses rose.
The Virginia Beach-based company, which administers government health programs, reported a third-quarter profit of $48.1 million, or 96 cents per diluted share, compared with $84.3 million, or $1.68 per diluted share, in the same period last year. Health-care expense benefits had been markedly low in previous years.
Premium revenue in the quarter increased 7.4 percent to $1.6 billion, compared with $1.49 billion during the third quarter of 2010. But health benefits expenses rose 11.9 percent to $1.3 billion and selling and administrative expenses rose 22.4 percent to $130.8 million.
Membership increased 0.8 percent to about 2 million at the end of the third quarter, from the second quarter of this year.
“We are on track to accomplish what we set out to do this year, including preparing for significant growth in 2012 and beyond,” Amerigroup Chairman and CEO James G. Carlson said in a statement. “We won the opportunity to expand our business in Texas, and plans are moving along well for our expansion into a new state, Louisiana. And now we have taken the step to significantly enhance our profile in one of the largest Medicaid markets in the country, New York.“
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