|Edgar Online, Inc.|
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Item 6 - Selected Financial Data and our consolidated financial statements and related notes appearing elsewhere in this 2012 Form 10-K. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our actual results to differ materially from management's expectations. Factors that could cause such differences include those set forth under Part I, Item 1 - Business and Part I, Item 1A - Risk Factors, as well as Forward-Looking Statements discussed earlier in this 2012 Form 10-K.
We are a leading provider of managed care services to government-sponsored health care programs, focusing on
Medicaidand Medicare. Headquartered in Tampa, Florida, we offer a variety of health plans for families, children, and the aged, blind and disabled, as well as prescription drug plans. As of December 31, 2012, we served approximately 2.7 million members nationwide. We believe that our broad range of experience and exclusive government focus allows us to effectively serve our members, partner with our providers and government clients, and efficiently manage our ongoing operations.
Summary of Consolidated Financial Results
Summarized below are the key highlights for the year ended
• Membership increased 4%, reflecting growth in our
Kentucky, which commenced in November 2011and had a subsequent open enrollment in November 2012, and in Florida, as well as growth in our Medicare MA membership due to service area expansion. • Premiums increased 21%, mainly reflecting the membership growth in our
in certain of our
• Net Income decreased 30%, primarily due to a decrease in our
segment results, and higher selling, general and administrative expense
("SG&A") expense - mainly due to our spending on quality and growth
initiatives; partially offset by improved results in our MA and PDP
segments. 2011 results also benefited from a pre-tax gain of
on the repurchase of subordinated notes. The decrease in
results was due mainly to a lower amount of net favorable development of
prior period medical benefits payable in 2012 than occurred in 2011, and a
relatively higher MBR in the Kentucky Medicaid program due to transition
of members into managed care.
Key Developments and Accomplishments
Our strategic priorities for 2012 included improving health care quality and access for our members, ensuring a competitive cost position and delivering prudent and profitable growth.
Presented below are key developments and accomplishments relating to progress on our strategic business priorities that occurred or impacted our financial condition and results of operations during 2012 and for 2013, prior to the filing of this 2012 Form 10-K.
MO HealthNet Medicaid program members in 54 counties across the state. • In
January 2013, we acquired UnitedHealthcare Group Incorporated's Medicaidbusiness in South Carolina, which participates in South
Carolina's Healthy Connections Choices program across 39 of the state's 46
Health Plan, Inc.'sDesert Canyon Community Care (" Desert Canyon") MA plans. Approximately 4,000 Desert Canyonplan members in Mohave and Yavapai Counties became members of our Arizona MA health plan on January 1, 2013. 48