WellPoint has already raised a 2014 earnings forecast it laid out earlier this year, and the nation's second-largest health insurer expects the health care overhaul to help fuel its growth.
The Indianapolis insurer told investors Friday that an expansion of the state and federally funded Medicaid program in the overhaul will become a significant source of future enrollment gains. The overhaul is a federal law that aims to expand insurance coverage to millions of uninsured people.
Aside from the Medicaid expansion, the law also creates state-based exchanges on which customers are able to buy private coverage, sometimes with help from an income-based subsidy.
WellPoint is pushing more aggressively than many of its rivals into that business. It participates in 14 exchanges, and CEO Joseph Swedish said in a statement those exchanges "are tracking our general expectations."
The exchanges make up a relatively small slice of WellPoint's customer base. Overall, the insurer expects its total enrollment to grow 3 percent or 4 percent this year to almost 37 million people, and it aims to reach 40 million people by 2018.
"We believe the market is poised for unprecedented growth in covered lives," Swedish said in a webcast of the insurer's investor presentation in New York City.
WellPoint made its name nationally as a provider of private Blue Cross Blue Shield coverage, but it is pegging more of its future growth on the government business, which also includes the Medicare program for elderly customers and coverage for government employees. Swedish has said that government business now represents nearly 45 percent of its revenue base.
WellPoint said Friday it now expects full-year earnings to be greater than $8.20 per share. It also forecast that operating revenue, which excludes investment gains or losses, will grow about 4 percent to $73 billion. WellPoint had forecast in late January earnings of greater than $8 per share.
The new prediction still falls short of Wall Street's expectations. Analysts forecast earnings of $8.37 per share on $73.45 billion in operating revenue, according to FactSet.
The insurer recorded adjusted earnings of $8.52 per share last year, so this year's forecast implies a possible drop. Investors expect insurers to face many challenges this year. While the overhaul may provide enrollment growth, it also imposes taxes and fees that can strain insurer profitability, and it calls for Medicare funding cuts.
WellPoint Inc. shares hit an all-time high price of $102.56 shortly after trading started Friday, topping a previous high that was set Wednesday. The stock then retreated but was still up $1.19, to $100.90 in midmorning trading.
WellPoint shares soared 52 percent last year to close 2013 at $92.39.