Health Net Inc. reported fourth quarter earnings Tuesday that missed Wall Street expectations, as the company saw a bump in costs associated with the new Affordable Care Act. The Woodland Hills insurer posted net income of $19.8 million (25 cents a share) for the quarter ended Dec. 31, compared to $6 million (7 cents) for the same period last year. Revenue fell more than 3 percent to $2.7 billion. Analysts on average expected earnings of 29 cents a share on revenue of $2.75 billion, according to Thomson Financial Network. The company also announced earnings guidance of at least $3 a share for the year, as it expects revenue to rise some 30 percent due to increasing membership. For the quarter, the company said general and administrative expenses rose 16 percent to $280 million as it prepared for the Affordable Care Act. The company also reported a 3 percent drop in health-plan premium revenue to $2.6 billion. However, Chief Executive Jay Gellert said the company successfully pushed to increase enrollment in the government’s low-income Medicaid program, which rose about 3 percent last year to 1.1 million members. “Our efforts produced significant improvement in profitability in our commercial and Medicaid businesses compared with 2012,” he said in a statement. For the year, Health Net reported net income of $170 million ($2.12 a share), compared to $122 million ($1.47) in 2012. Revenue fell about 2 percent to $11 billion. Analysts on average expected earnings of $2.26 a share on revenue of $11 billion, according to Thomson Financial Network. Shares closed down 23 cents, or a fraction of a percent, to $32.52 on the New York Stock Exchange.
