PacifiCare Health Systems Inc. said Thursday that more members in its plans and fewer medical costs helped revenue and profit in the second quarter.
The Cypress-based health plan operator said its second-quarter profit jumped 22% to $92.6 million on an 18% rise in revenue to $3.6 billion, versus a year earlier.
PacifiCare’s results beat analysts’ predictions of $82.8 million in income on revenue of $3.5 billion, according to Thomson Financial.
The company said its commercial membership, or people covered by an employer-sponsored plan, increased 15% to 2.6 million. PacifiCare said its Medicare membership rose 6% to 765,900.
PacifiCare is one of the key players in the Medicare market, which has become more attractive after Congress passed a law last year to boost funding.
The company also said that its medical loss ratio fell to 84.1% during the quarter. Medical loss ratio is the percentage of revenue that PacifiCare uses to pay for healthcare services.
PacifiCare’s shares rose 2.6% to $76.8 following the earnings report.
Earlier this month, PacifiCare agreed to be bought by Minnesota’s UnitedHealth Group Inc. for more than $8 billion. The deal is expected to close late this year or in early 2006. The combined companies will serve about 26 million people nationwide.
PacifiCare also reiterated its 2005 profit forecast of $322 million to $336 million.
