First quarter earnings for many insurers reflected big adjustments to two major outside changes to the insurance landscape: Obamacare and new Hepatitis C drugs.
Many insurers saw their individual insurance rolls swell as people signed up via Healthcare.gov or the various state exchange websites. Of course, those same insurers were hit with additional fees and taxes as Obamacare came fully online, so profitability took a bit of a hit.
The cost trend was due to a big increase in spending on hepatitis C medications coinciding with Gilead Sciences' (NASDAQ: GILD ) release of Sovaldi to the general market starting late fourth quarter 2013. This took many insurers by surprise, with UnitedHealth Group's (NYSE: UNH ) Dan Schumacher saying that hepatitis C spending was "a multiple of what we expected."
Only one of the diversified insurers really seemed adequately prepared for these trends: WellPoint (NYSE: ANTM ) . Management ran with conservative guidance, bet big on Obamacare, and controlled well for hepatitis C cost. In fact, management increased earnings guidance for 2014 despite also increasing their expectations for hepatitis C spend for the balance of the year by $100 million. Find out more in the video below, as Motley Fool health care analysts Michael Douglass and David Williamson take you through WellPoint's success and what this means for investors going forward.
Here's 1 stock that could even embarrass WellPoint
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.