UPDATE 3-WellCare posts profit above forecast, shares jump

* Earns 88 cts share vs 41 cts expected by analysts

* Forecasts full-year profit of $2.75 to $2.95/share

* Shares rise 23 percent (Adds analyst comment, trends among rival insurers, shares)

By Ransdell Pierson

NEW YORK, July 28 (Reuters) - WellCare Health Plans Inc (WCG.N) reported quarterly earnings on Tuesday that well above forecasts, helped by tighter controls on expenses and unexpectedly high Medicare reimbursements, sending its shares 23 percent higher after the close of trading.

"They just had a very solid second quarter, supported by a Medicare risk-adjuster payout in excess of what was expected," said analyst Thomas Carroll of Stifel Nicolaus & Co.

The shares of other U.S. health insurers rose broadly earlier on Tuesday amid hopes a health reform bill would not include a government-run option and positive earnings news from Coventry Health Care Inc (CVH.N).

WellCare said it earned $37 million in the second quarter, or 88 cents per share, compared with $11.1 million, or 26 cents per share, in the year ago period.

Analysts on average expected 41 cents per share, according to Reuters Estimates.

In May, WellCare agreed to pay $80 million to settle Florida healthcare fraud allegations. The company has also resolved an investigation by the Securities and Exchange Commission.

Premium revenue for the second quarter increased 9 percent to $1.8 billion. Reuters Estimates had forecast company revenue of $1.77 billion.

"(Revenue) growth is attributable to increased Medicare Advantage and Medicaid plan premium revenue, offset in part by a decrease in Medicare PDP premium revenue," the Tampa, Florida-based company said in a release.

Membership in the company's health plans slipped to 2.4 million from 2.5 million members in the year-earlier quarter. But earnings were bolstered by a decrease in selling, general and administrative expenses.

WellCare's medical benefit ratio, a key measure of the amount of premiums spent on medical claims, improved slightly to 84.1 percent in the second quarter from 84.2 percent in 2008.

Stifel Nicolaus' Carroll said he expected the medical benefit ratio to deteriorate to the 87 percent range and that its unexpected swing in a favorable direction was a big reason WellCare beat profit forecasts in the quarter.

The company expects full-year net income, excluding special items, of $2.75 to $2.95 per share. WellCare, which earned $3.17 per share last year, previously said it expects income this year to be materially less than 2008.

WellCare forecast premium revenue for the full-year of between $6.75 billion and $6.85 billion.

Rival insurer Coventry Health posted second-quarter results that easily topped analyst forecasts and raised its full-year profit forecast. Aetna Inc (AET.N) shares also rose as analysts said the insurer's new, lower forecast was achievable.

WellCare shares were trading at $23.90 after hours, up from their closing price of $19.48 on the New York Stock Exchange. (Reporting by Ransdell Pierson; editing by Andre Grenon and Steve Orlofsky)