WellPoint Inc., the largest U.S. health insurer based on membership, reports fourth-quarter and full-year 2010 results Wednesday before the market opens.

WHAT TO WATCH FOR: Rival UnitedHealth Group Inc. said last week its fourth-quarter profit jumped 10 percent as a drop in health care use continued to help the insurer. UnitedHealth is the first big insurer to release its earnings results every quarter, and many see it as a bellwether for the rest of the sector.

That should prove to be the case in the fourth quarter, at least with utilization. Analysts say they expect health care use to be low again compared to 2009, like it was in the third quarter, which helps insurer performances. Analysts and insurance executives have said health care use dropped compared to the final quarters of 2009 in part because swine flu cases from that year elevated claims. They also say use tends to fall in a struggling economy, as consumers look to save money.

The performance of WellPoint, which is based in Indianapolis, also will be helped by strong pricing, Goldman Sachs analyst Matthew Borsch said in a note previewing the quarter. But he added that a lack of adequate rate increases for individual health insurance in California could affect the insurer.

WellPoint's California subsidiary delayed and then scaled back rate increases last year after it took heavy criticism nationally for planning hikes that averaged 25 percent for individual customers. The insurer later toned the increases to an average of 14 percent. WellPoint has said high unemployment and rising care costs were behind the hikes.

The insurer also is expected to give an initial forecast on its 2011 performance when it discusses the last quarter of 2010. Analysts will look for more insight into the health care overhaul's impact on the insurer.

WHY IT MATTERS: WellPoint had medical membership of about 33.5 million people at the end of last year's third quarter. It runs Blue Cross Blue Shield plans in 14 states and Unicare plans in several others. The company also is the second-largest insurer based on revenue, trailing only UnitedHealth.

WHAT'S EXPECTED: Analysts polled by FactSet expect, on average, earnings of $1.22 per share in the fourth quarter on $14.37 billion in revenue. For the full year, analysts expect earnings of $6.60 per share on $58.1 billion in revenue. WellPoint said in December it expected a profit of at least $6.60 per share for 2010.

LAST YEAR'S QUARTER: WellPoint earned $2.74 billion, or $5.95 per share, in the three months that ended Dec. 31, 2009. That was a big leap from the last quarter of 2008, fueled by the insurer's sale of its NextRx subsidiary to Express Scripts. The deal added $4.79 to the 2009 per-share results.

WellPoint's operating revenue, which doesn't include investment gains or losses, fell 2.4 percent to $15.06 billion in the quarter. Company officials said they saw signs of stabilization in the unemployment rate, which affects enrollment in employer-sponsored group coverage. Still, WellPoint's total enrollment slid 3.9 percent in 2009 to 33.7 million people.