Earnings for Amerigroup Corp. were down 28 percent during the second quarter as the Virginia-Beach based managed-care company spent more on health benefits expenses. Amerigroup reported net income of $32 million, or 63 cents per diluted share, versus $44.3 million, or 83 cents per diluted share for the same time last year.
However, an increase of 512,000 members helped boost revenue by 45.8 percent to $2.23 billion, compared to $1.53 billion for the second quarter of 2011.
The company said health benefits expense, as a percentage of premium revenue, was 86.9 percent, up from 84.1 percent a year earlier and 85.3 percent in the first quarter. Medical claims payable as of June 30 totaled $686 million compared to $618 million as of March 31, 2012.
Membership stood at 2.7 million members, with the company showing increases due to the May 1 closing of the Health Plus acquisition in New York and an expanded presence in Louisiana.
Amerigroup, a coordinator of services for publicly funded health-care programs, announced earlier this month that it had agreed to be acquired by health-benefits provider WellPoint Inc. in a cash deal of nearly $4.46 billion that is expected to close in the first quarter of 2013.
“We are pleased with our growth in the quarter as a result of closing the Health Plus transaction and going live in the last of the three regions in Louisiana,“ James G. Carlson, Amerigroup’s chairman and CEO said in a statement.
The company expects to begin operations in the state of Kansas during the first quarter of 2013 following a successful competitive bid.
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