(Corrects Oct. 31 story to remove reference to Molina Healthcare in third paragraph. Molina does not have a presence in Kentucky)
Oct 31 (Reuters) - WellCare Health Plans Inc reported a quarterly profit below market estimates and cut its full-year earnings forecast after its Medicaid insurance program in Kentucky performed below expectations.
WellCare’s Medicaid claims rose to 91 percent of premium revenue in the quarter from 80 percent a year ago primarily on higher costs associated with Medicaid plans offered in Kentucky.
High costs in plans offered in Kentucky have hurt WellCare and other insurers such as Coventry Health Care Inc .
Centene said earlier this month it would stop offering Medicaid cover in Kentucky by 2013.
WellCare also took a charge of $18 million in the third quarter related to a settlement with the Centers for Medicare & Medicaid Services in Georgia.
Medicaid is a health program run by the U.S. government for the poor, while Medicare caters to the elderly.
The health insurer, which also competes with Cigna Corp CI.N and Aetna Inc, kept its full-year premium revenue forecast unchanged at about $7.15 billion to $7.20 billion.
However, it cut its adjusted earnings forecast to $4.90 to $5.05 per share for 2012 from $5.25 to $5.45 per share.
Analysts are expecting a full-year profit of $5.40 per share, on revenue of $7.24 billion, according to Thomson Reuters I/B/E/S.
The company’s third-quarter net income fell to $38.3 million, or 87 cents per share, from $88.3 million, or $2.03 per share, a year earlier.
Excluding one-time items, it earned $1.05 per share. Revenue rose 18 percent to $1.82 billion.
Analysts expected a profit of $1.47 per share on revenue of $1.83 billion.
WellCare also bought UnitedHealth’s Medicaid Business in South Carolina on Wednesday, adding 65,000 Medicaid memberships.
The Tampa, Florida-based insurer’s shares, which have lost about 16 percent in the last three months, closed at $55.23 on Friday on the New York Stock Exchange. (Reporting by Vidya P L Nathan; Editing by Roshni Menon)