WellPoint

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WellPoint Inc.
Type Public
Traded as NYSEWLP
S&P 500 Component
Industry Managed health care
Founded Anthem Insurance and WellPoint Health Networks merger in 2004
Headquarters Indianapolis, Indiana, USA
Key people Joseph R. Swedish - CEO
Products Blue Cross Blue Shield
Revenue Increase US$61.7 Billion (FY 2012)[1]
Net income Increase US$2.66 Billion (FY 2012)[1]
Total assets Increase US$58.96 Billion (FY 2012)[2]
Total equity Increase US$23.80 Billion (FY 2012)[2]
Employees 37,000+
Website www.wellpoint.com
Company headquarters on Monument Circle in Indianapolis

WellPoint, Inc. is the largest managed health care, for-profit company in the Blue Cross and Blue Shield Association. It was formed when WellPoint Health Networks, Inc. merged into Anthem, Inc., with the surviving Anthem adopting the name, WellPoint, Inc. and began trading its common stock under the WLP symbol on December 1, 2004.

Company description[edit]

WellPoint is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as Blue Cross Blue Shield in 10 New York City metropolitan counties and as Blue Cross, Blue Shield or Blue Cross Blue Shield in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through UniCare. In addition to Blue Cross, the company also operates under the Anthem name.

WellPoint's corporate "political action committee" (PAC), called "WellPAC," raised $1.3 million in 2010, and contributed nearly all of it to Federal and non-Federal candidates. Of the monies given to Federal candidates, 75 percent was given to Republicans, whose party opposes the health care reform enacted, and 25 percent was given to Democratic candidates. [3] WellPoint Inc. spent an additional $1 million on lobbying activities in 2010, and 77 percent of that amount was given to Republicans, and 22 percent was given to Democrats.[4]

In 2009, WellPoint sold its NextRx subsidiaries to Express Scripts for $4.675 billion.[5]

In 2012, WellPoint acquired CareMore from CCMP Capital.[6]

In June 2002, WellPoint acquired 1-800 Contacts from Fenway Partners.[7] One month later, WellPoint acquired Amerigroup.[8]

In March 2013, WellPoint named Joseph R. Swedish as Chief Executive Officer. Mr. Swedish has 40 years of experience in the health care industry. [9]

Quality of care[edit]

In the category of "Meeting National Standards of Care" California's state patient advocacy office gave Anthem a rating of 2 out of 4 stars in its annual report card.[10] In 2014 it received 3 out of 4 stars in the same category.[11]

Controversies[edit]

Cancellation of policies[edit]

In July 2008, WellPoint subsidiary Anthem Blue Cross agreed to a settlement with the California Department of Managed Health Care. To resolve allegations of improper policy rescissions (cancellations), WellPoint paid $10 million and reinstated 1,770 policy-holders whose plans they had cancelled. They also agreed to provide compensation for any medical debts incurred by these policy-holders in the meantime. However, WellPoint did not officially admit liability.

In 2010, a report in Reuters alleged that the Anthem Blue Cross subsidiary improperly singled out women with breast cancer for cancellation of their policies shortly after they were diagnosed with breast cancer. The Reuters story said that Wellpoint "using a computer algorithm, identified women recently diagnosed with breast cancer and then singled them out for cancellation of their policies."[12][13] The story not only caused considerable public outrage, but led Secretary of Health and Human Services, Kathleen Sebelius, and President Barack Obama, to call on WellPoint to end the practice.[14]

Health care reform[edit]

In August 2009, WellPoint’s Anthem Blue Cross unit, the largest for-profit insurer in California, contacted its employees and urged them to get involved to oppose the Democratic Party-led Congress' plan for health care reform. "Regrettably, the congressional legislation, as currently passed by four of the five key committees in Congress, does not meet our definition of responsible and sustainable reform", Anthem said in a company e-mail. The proposals would hurt the company by "causing tens of millions of Americans to lose their private coverage and end up in a government-run plan." Consumer Watchdog, a nonprofit watchdog organization in Santa Monica, has asked California Atty. Gen. Jerry Brown to investigate its claim that WellPoint Inc. pushed workers to write their elected officials, attend town hall meetings and enlist family and friends to ensure an overhaul that matches the firm’s interests. According to Consumer Watchdog, California's labor code directly prohibits coercive communications, including forbidding employers from "tending to control or direct" or "coercing or influencing" employees' political activities or affiliations. "WellPoint has not been contacted by the California attorney general and has not seen any complaint; therefore, we cannot respond to any questions at this time,” a company spokesperson said.[15]

The former Vice President for Public Policy and External Affairs at WellPoint, Elizabeth Fowler, is currently the Senior Counsel to Max Baucus, the chairman of the Senate Finance Committee and leading opponent of the "public option" in health care reform.[16]

Through 2010 and into 2011, WellPoint senior executives have been meeting monthly with executives of other major health insurers to blunt the effect of the health care reform law.[17]

In March 2010, WellPoint announced it was reclassifying some of its administrative costs as medical care costs in order to meet new loss ratio requirements under the health care law. (The law requires insurers to spend at least 80% or 85% of customer premiums on health care services, depending on the type of plan.)[18]

Premium increases[edit]

In 2009, Anthem Health Plans of Maine, a WellPoint subsidiary, sued the state of Maine for the right to increase premiums further.[19] Since Maine licenses insurance companies through its Department of Insurance, Anthem would need the state's permission to raise rates. The company argues that they needed an 18.5% increase to maintain a 3% profit margin, while the state only approved a 10.9% increase. The state is arguing that the company makes enough profit, and that it should employ cost-cutting measures in a recession. Wellpoint's premiums have increased 400% since the company was made private in 1999. The case was presented on October 7, 2009 in the Courts of Maine.[20] The Court disagreed with Anthem on all of its arguments and found that, unlike other forms of insurance, the Maine Insurance Code does not require the Superintendent to consider profits at all.[21]

In February 2010, WellPoint announced that some Anthem Blue Cross individual policies in California would see a rate increase as high as 39%. This announcement released a firestorm of public criticism. The US Federal and California government regulators are investigating this.[22]

Giving for uninsured[edit]

In 2007, WellPoint pledged to spend $30 million over three years, through the company's charitable foundation, to help the uninsured. In March 2010, the Los Angeles Times reported that WellPoint's tax records and website showed that the company gave only $6.2 million, which amounts to less than 0.0001% of the posted profit earnings of over $65 billion for 2009. The company disputed that, saying that the foundation did fulfill its $30-million commitment by mid-2009, but declined to provide any financial details to support its position.[23]

Acquisition of Amerigroup[edit]

On July 9th, 2012, Wellpoint entered into an agreement to acquire Amerigroup Corporation for $4.9 billion in cash. [24]

References[edit]

  1. ^ a b WellPoint Health Networks (WLP) annual SEC income statement filing via Wikinvest
  2. ^ a b WellPoint Health Networks (WLP) annual SEC balance sheet filing via Wikinvest
  3. ^ Center for Responsive Politics, accessed Feb. 3, 2011, http://www.opensecrets.org/pacs/lookup2.php?strID=C00197228&cycle=2010
  4. ^ Center for Responsive Politics, accessed Feb. 3, 2011, http://www.opensecrets.org/orgs/affiliates.php?id=D000000109&cycle=2010
  5. ^ *Scripts Completes Acquisition of WellPoint's NextRx Subsidiaries
  6. ^ WellPoint to Buy CareMore for $800 Million
  7. ^ WellPoint Acquires 1-800 Contacts
  8. ^ WellPoint to Acquire Amerigroup Amid Health Care Overhaul
  9. ^ http://www.wellpoint.com/AboutWellPoint/Leadership/ExecutiveLeadership/PW_E191992.html
  10. ^ http://www.opa.ca.gov/about/consumer_information/files/pdf/OPA%20Booklet_2011.pdf
  11. ^ "Report criticizes California health plans for treatment of chronic ailments". Los Angeles Times. Retrieved 28 March 2014. 
  12. ^ http://businessjournalism.org/2010/10/04/reuters-and-milwaukee-journal-sentinel-receive-2010-barlett-steele-awards/
  13. ^ http://sabew.org/2010/10/reuters-milwaukee-j-s-win-11-barlett-steele-awards/
  14. ^ http://www.slate.com/id/2253577/
  15. ^ http://www.latimes.com/business/la-fi-insurers-reform3-2009sep03,0,2545747.story LA Times, WellPoint, United Health accused of illegal actions, 3 Sept 2009
  16. ^ http://www.msnbc.msn.com/id/33129315/ Fact or fiction? Senate chairman has ties to big insurer
  17. ^ Bloomberg, "UnitedHealth Joins WellPoint to hone Health Law Lobby", January 31, 2011, http://www.bloomberg.com/news/2011-01-31/unitedhealth-joins-wellpoint-in-alliance-aiming-to-hone-health-law-lobby.html
  18. ^ Igor Volsky, "WellPoint Reclassifies Costs As ‘Medical Care’ To Meet Reform’s Medical Loss Ratio Requirement," Think Progress, March 31, 2010. http://wonkroom.thinkprogress.org/2010/03/31/wellpoint-mlr/
  19. ^ http://seminal.firedoglake.com/diary/8735
  20. ^ Delaney, Arthur (October 5, 2009). "WellPoint Subsidiary Fights Maine Over Big Rate Hike (VIDEO)". Huffington Post. 
  21. ^ http://www.mainecahc.org/publications/Anthem_summary.pdf
  22. ^ Anthem blue cross raises premium, San Francisco Chronicle, Feb 6 2010, http://articles.sfgate.com/2010-02-06/business/17848006_1_health-insurance-department-of-insurance-plans-home-and-automobile-insurers
  23. ^ Noam Levey (March 18, 2010). "WellPoint's giving for uninsured falls short, records show". Los Angeles Times. 
  24. ^ Nussbaum, Alex (9 July 2012). "WellPoint to Buy Amerigroup for $4.9 Billion in Cash". bloomberg. Retrieved 9 July 2012. 

Further reading[edit]

  • International Directory of Company Histories, Vol. 25. St. James Press, 1999
  • Anders, George, "Blue Cross of California Sells Stake in WellPoint Health for $476 Million," Wall Street Journal, January 28, 1993.
  • Connolly, Jim, "California Blue Cross Plans to Start For-Profit Sub," National Underwriter Life & Health-Financial Services Edition, September 14, 1992.

External links[edit]

http://ir.wellpoint.com/phoenix.zhtml?c=130104&p=irol-irHome