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(Reuters) - WellCare Health Plans Inc (WCG.N) reported a quarterly profit that blew past analysts' estimates, helped by higher enrolments in all its plans and lower costs in its Medicare business, sending its shares up as much as 4.7 percent.
The company also raised its full-year revenue and profit forecast, saying it continues to see significant avenues for growth, organically and through acquisitions in both Medicaid and Medicare, amid an unpredictable political environment.
The U.S. health insurance industry is wading through a turbulent phase as President Donald Trump and Republicans have vowed to repeal Obamacare, formally known as the Affordable Care Act, but have failed to push through legislation.
WellCare's shares, which rose about 37 percent since Trump's election, hit a record high of $165.95 in early trading on Wednesday.
The company said its Medicaid memberships increased 10.3 percent to about 2.6 million as of March 31, mainly due to the boost it got from its acquisition of Care1st Arizona and the launch of its Nebraska Medicaid business.
Memberships rose 9 percent in the quarter in WellCare's Medicare business and by 7 percent in its Medicare Prescription Drug Plans business.
Medicaid is a federal-state program providing coverage for low-income families, while Medicare sells plans to the elderly and to people with disabilities.
The amount WellCare spent on medical claims out of the premiums it earned, a key measure of costs known as medical benefits ratio (MBR), rose in the Medicaid business. The lower the ratio the better for insurers.
The company's MBR deteriorated to 89.4 percent in Medicaid, but improved to 83 percent in the Medicare business.
The company, which closed its $600 million acquisition of Universal American Corp UAM.N last month, has been trying to bolster its Medicare Advantage business to offset any likely hit from a possible repeal and replace of Obamacare.
Medicare Advantage, an alternative to the standard fee-for-service Medicare in which private insurers manage health benefits, is the fastest growing form of government healthcare, with enrollments of 18 million people last year.
WellCare's net income surged 78 percent to $67.3 million in the first quarter. Excluding items, it earned $1.61 per share, handily beating the average analyst estimate of $1.18 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 11.6 percent to $3.95 billion.
Tampa, Florida-based WellCare raised its full-year profit forecast to $6.55-$6.80 per share on revenue of $16.55-$16.95 billion.
Reporting by Divya Grover in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty