WellPoint, Inc. (NYSE: WLP) is the largest health plan 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. On April 13, 2009 it was announced that WellPoint had reached a definitive agreement under which St. Louis based Express Scripts will acquire WellPoint's NextRx subsidiaries for $4.675 billion.[3]
Express Scripts, the United States' third largest Pharmacy Benefit Management organization, is expected to officially close the transaction in the second quarter of 2009.
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 Democrat candidates. [4] 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.
WellPoint Health Networks Inc. ranks among the largest publicly traded healthcare insurers in the United States. Its approximately 6.6 million members nationwide are served by two subsidiaries: Blue Cross of California and UNICARE. WellPoint offers a comprehensive selection of healthcare products, including health maintenance organizations (HMOs), preferred provider organizations (PPOs), point-of-service plans (POS), self-insured employer sponsored programs, and specialty plans for dental, optical, pharmacy, and mental health coverage. WellPoint's principal products in California are the CaliforniaCare HMO and the Prudent Buyer Plan PPO. The latter is the state's largest PPO with approximately 2.8 million members served by a network of some 42,000 physicians and 443 hospitals. On the national level, WellPoint's most important plans are the UNICARE Classic POS modeled on the Prudent Buyer Plan and the UNICARE Health Plans HMO which as of March 1998 was still in the early start-up stage.


WellPoint, Inc. (WellPoint) is a health benefits company in terms of medical membership in the United States. As of December 31, 2010, the Company served 33.3 million medical members through its affiliated health plans and a total of 69.2 million individuals through all subsidiaries. WellPoint is an independent licensee of the Blue Cross and Blue Shield Association (BCBSA), an association of independent health benefit plans. WellPoint serves its members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield (BCBS), licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as BCBS in 10 New York city metropolitan and surrounding counties, and as Blue Cross or BCBS in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas it does business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross Blue Shield, or Empire Blue Cross (in its New York service areas). The Company also serves customers as UniCare. WellPoint is licensed to conduct insurance operations in all 50 states through its subsidiaries.
The Company offers a spectrum of network-based managed care plans to the large and small employer, individual, Medicaid and senior markets. Its managed care plans include preferred provider organizations (PPOs), health maintenance organizations (HMOs), point-of-service plans (POS) plans, traditional indemnity plans and other hybrid plans, including consumer-driven health plans (CDHPs), and hospital only and limited benefit products. In addition, it provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It also provides an array of specialty, and other products and services, including life and disability insurance benefits, dental, vision, behavioral health benefit services, radiology benefit management, analytics-driven personal healthcare guidance, long-term care insurance and flexible spending accounts.
For the Company’s fully insured products, WellPoint charges a premium and assume all of the health care risk. Under self-funded and partially insured products, it charges a fee for services, and the employer or plan sponsor reimburses it for all or most of the health care costs. During the year ended December 31, 2010, approximately 93% of its operating revenue was derived from premium income, while approximately 7% was derived from administrative fees and other revenues. As of December 31, 2010, its medical membership customer base included Local Group, and individuals under age 65 and their covered dependents. Other major customer types included National Accounts, BlueCard Host, Senior, State-Sponsored Programs and the Federal Employee Program (FEP).
The Company manages its operations through three segments: commercial, consumer and other. Its commercial and consumer segments both offer a mix of managed care products, including PPOs, HMOs, traditional indemnity benefits and POS plans, as well as a variety of hybrid benefit plans, including CDHPs, hospital only and limited benefit products. Its commercial segment includes Local Group (including Unicare), National Accounts and certain other ancillary business operations (dental, vision, life and disability and workers’ compensation). Business units in the commercial segment offer fully insured products and provide an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services.
The Company’s consumer segment includes senior, state-sponsored and individual businesses. Senior business includes services, such as Medicare Part D, Medicare Advantage and Medicare Supplement, while state-sponsored business includes the Company’s managed care alternatives for the Medicaid and State Children’s Health Insurance Plan programs. Its other segment includes the Comprehensive Health Solutions Business unit (CHS) that brings together its resources. CHS includes provider relations, care and disease management, employee assistance programs, including behavioral health, radiology benefit management and analytics-driven personal health care guidance. The Company’s other segment also includes results from its Federal Government Solutions (FGS, business). FGS business includes the Federal Employee Program (FEP), and National Government Services, Inc. (NGS), which acts as a Medicare contractor in several regions.
The Company’s PPO products offer the member an option to select any healthcare provider, with benefits reimbursed by it at a higher level when care is received from a participating network provider. CDHPs provide consumers with financial responsibility, choice and control regarding how their healthcare dollars are spent. Indemnity products offer the member an option to select any healthcare provider for covered services. HMO products include managed care benefits, through a participating network of physicians, hospitals and other providers. POS products blend the characteristics of HMO, PPO and indemnity plans. In addition to fully insured products, the Company provides administrative services to employers that maintain self-funded health plans. These administrative services include underwriting, actuarial services, medical management, claims processing and other administrative services for self-funded employers.
BlueCard host members are members who reside in or travel to a state, in which a WellPoint subsidiary is the Blue Cross and/or Blue Shield licensee and who are covered under an employer sponsored health plan serviced by a non-WellPoint controlled BCBS licensee, who is the home plan. The Company performs certain administrative functions for BlueCard host members, for which it receives administrative fees from the BlueCard members’ home plans. Other administrative functions, including maintenance of enrollment information and customer service, are performed by the home plan.
The Company offers a variety of senior plans, products and options, such as Medicare supplement plans, Medicare Advantage (including private fee-for-service plans) and Medicare Part D Prescription Drug Plans (Medicare Part D). Medicare supplement plans pay the difference between healthcare costs incurred by a beneficiary and amounts paid by Medicare. Medicare Advantage plans provide Medicare beneficiaries with a managed care alternative to traditional Medicare and often include a Medicare Part D benefit. Medicare Part D offers a prescription drug plan to Medicare and dual eligible (Medicare and Medicaid) beneficiaries.
WellPoint offers a range of health insurance plans with a variety of options and deductibles for individuals under age 65 who are not covered by employer-sponsored coverage. It has contracts to serve members enrolled in Medicaid, State Children’s Health Insurance Programs and other publicly funded healthcare programs for low income and/or high medical risk individuals. It provides services in California, Indiana, Kansas, Massachusetts, New Hampshire, New York, South Carolina, Texas, Virginia, West Virginia and Wisconsin.The Company offers an array of individual and group life insurance benefit products to both large and small group customers in conjunction with its health plans. The life products include term life and accidental death, and dismemberment. It offers short-term and long-term disability programs, in conjunction with its health plans. The Company offers specialized behavioral health plans and benefits management. It offers outpatient diagnostic imaging management services to health plans.
WellPoint offer analytics-driven personal healthcare guidance. Its dental plans include networks in certain states, in which it operates. Many of the dental benefits are provided to customers enrolled in the Company’s health plans and are offered on both an insured and self-funded basis. Its vision plans include networks within the states it operates. The Company offers long-term care insurance products to its California members through a subsidiary. The long-term care products include tax-qualified and non-tax qualified versions of a nursing home care plan and policies covering long-term care and home health services. Through its subsidiary, NGS, it serves as a intermediary, carrier and Medicare administrative contractor providing administrative services for the Medicare program, which provides coverage for persons who are 65 or older and for persons who are disabled or with end-stage renal disease.


Despite WellPoint's healthy profits--even in 1994 during the uncertainty with the Department of Corporations its profit margin was 13 percent--it had a bad reputation among California doctors. Cathy Tokarski wrote in Medical Economics, they complained of WellPoint's "bargain-basement reimbursement rates and strong-arm tactics against physicians." One group of doctors complained to DOC that WellPoint had kicked them out of its PPO because they had left its HMO. WellPoint countered it had only excluded the doctors after they signed an exclusive agreement with one of its competitors.
Hospitals also complained, in particular in the summer of 1995 when WellPoint announced it was organizing a two-tiered network of hospitals in California. Hospitals who provided convincing plans for cutting costs and providing increased quality in healthcare would be placed in the first tier. Those institutions would get a higher volume of WellPoint patients, while patients who used tier two hospitals would be required to make higher co-payments. Most hospitals chose to cooperate and complete WellPoint's questionnaire rather than be squeezed out of the extensive WellPoint network altogether.
Studies released by the California Medical Association between 1994 and 1996 claimed that WellPoint's CaliforniaCare HMO spent less of its total revenues on patient care and more on profits and overhead than any other plan in California. For example, the CMA found that WellPoint spent only 73 percent of its revenues on patients in 1995 and that at the same time its CEO Leonard Schaeffer was one of the highest paid healthcare executives in California. By contrast, the nonprofit Kaiser Permanente put 96.8 percent on medical care. WellPoint maintained the CMA's survey was flawed pointing out that it ignored differences in accounting practice in nonprofit and for-profit entities, and the higher overhead required to support independent sales agents.
Other groups gave WellPoint poor ratings as well. The Pacific Business Group, an organization of employers in California, rated 13 HMOs in 14 service categories. WellPoint's CaliforniaCare was the only plan that did not receive a single "A" in any category. In addition, the National Committee for Quality Assurance which evaluates managed healthcare refused to give its accreditation to the WellPoint HMO.
WellPoint's results in 1997 continued to be good. Its operating income at the end of 1997 was up 14 percent while its stock rose 23 percent. Membership that year increased 19 percent, partly because of the Hancock and Mass Mutual acquisitions and also because of strong growth in its co-payment plan. The company hoped to finish the decade on the same strong footing.
Principal Subsidiaries: Blue Cross of California; UNICARE.

OVERALL
Beta: 1.01
Market Cap (Mil.): $29,464.80
Shares Outstanding (Mil.): 367.16
Annual Dividend: 1.00
Yield (%): 1.25
FINANCIALS
WLP.N Industry Sector
P/E (TTM): 10.86 11.53 26.13
EPS (TTM): -31.29 -- --
ROI: -- 0.01 4.83
ROE: 12.11 3.37 9.92


Statistics:
Public Company
Incorporated: 1992
Employees: 10,100
Sales: $227.4 million (1996)
Stock Exchanges: New York
Ticker Symbol: WLP
SICs: 6324 Hospital & Medical Service Plans; 6719 Holding Companies, Not Elsewhere Classified

Name Age Since Current Position
Angela Braly 49 2010 Chairman of the Board, President, Chief Executive Officer
Wayne DeVeydt 41 2007 Chief Financial Officer, Executive Vice President
John Cannon 57 2010 Executive Vice President, General Counsel, Secretary, Chief Public Affairs Officer
Brian Sassi 50 2008 Executive Vice President - Marketing & Strategy; President and CEO, Consumer Business Unit
Samuel Nussbaum 62 2010 EVP - Clinical Health Policy and CMO; Interim President- Comprehensive Health Solutions
Randal Brown 52 2006 Executive Vice President and Chief Human Resources Officer
Kenneth Goulet 51 2007 Executive Vice President; President and Chief Executive Officer - Commercial Business Unit
Lori Beer 43 2010 Executive Vice President - Enterprise Business Services (EBS) Organization
Martin Miller 48 2009 Senior Vice President, Chief Accounting Officer, Chief Risk Officer, Controller
Susan Bayh 51 2001 Independent Director
William Mays 65 2001 Independent Director
Donald Riegle 73 2001 Independent Director
William Ryan 67 2001 Independent Director
George Schaefer 65 2001 Independent Director
Lenox Baker 69 2002 Independent Director
Jacquelyn Ward 72 2002 Independent Director
William Bush 72 2004 Independent Director
Warren Jobe 70 2004 Independent Director
Julie Hill 64 2004 Independent Director
Ramiro Peru 55 2004 Independent Director
Sheila Burke 60 2004 Independent Director

Address:
21555 Oxnard Street
Woodland Hills, California 91367
U.S.A.
 
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