General Company Info

WellPoint

WellPoint (NYSE: WLP) is the nation's leading health benefits company serving the needs of approximately 28 million medical members nationwide. WellPoint is the Blue Cross licensee in California and a Blue Cross Blue Shield licensee in 12 other states. The company is the offspring of the late 2004 merger between Anthem and WellPoint Health Networks. WellPoint has created a variety of PPOs, HMOs, various hybrid and specialty network-based dental and health care services that combine the attributes consumers find attractive with effective cost control techniques.

Global Headquarters: Indianapolis, IN Employment: 38,000+ people 2004 Sales: $20.8 Billion

Organizational Structure

WellPoint’s Blue Cross and Blue Shield companies – serves members in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, Virginia and Wisconsin. Lumenos –acquired in the summer of 2005, it offers consumers Health Savings Account plans (HSA) and Health Reimbursement Account plans (HRA), information, services and incentives to become better informed about their health and engage in health promoting behaviors. HealthLink – provides network rental for workers’ compensation and health benefits programs in Missouri, Arkansas, Illinois, Iowa, Kentucky, and West Virginia. UniCare – offers comprehensive array of health care plans and specialty products where the company does not have a licensed Blue plan. AdminaStar Federal (Indiana) & United Government Services (Wisconsin) – administrators of government health benefits programs, primarily Medicare. Additionally, there are a number of specialty companies within WellPoint.

In the news

October 27, 2005 (DowJones) - An Illinois court has ruled that a WellPoint Inc. health-insurance unit breached its contracts with its members by increasing co-payments and deductibles while cutting benefits, the company disclosed Wednesday. The court granted summary judgment in favor of the plaintiffs, holding that Unicare had breached its contracts and that class members were entitled to damages from Sept. 1, 2000, to the present, WellPoint said in a regulatory filing Wednesday. The company didn't provide an estimate of potential damages. UniCare is considering its legal options, including appeal, Indianapolis-based WellPoint said in the filing.

October 26, 2005 (BestWire) - In the first half of 2005, dominant health insurance carriers continued to rack up strong earnings, favored by lower-than-expected cost trends rather than by strong organic growth in enrollment. This could be attributed to success at controlling utilization, mainly through product innovation geared to increasing public awareness of the high cost trend and its consequences. Further contributing to improved profitability is the ability of companies to continue to lower administrative costs as technological advancements allow insurers to process larger numbers of members and claims in a more efficient manner…..Of the commercial carriers, WellPoint Inc. experienced 148.6% growth in premium year over year, but this compares premium at legacy Anthem Inc. only in 2004 with the combined companies in 2005. On a comparable basis, WellPoint's premium growth was 8.4%.

Top Competitors

Aetna - one of the most active health insurance companies in the US. Aetna covers almost 14 million individuals under its health plans, nearly 13 million dental plan members, and more than 14 million group insurance members. CIGNA - wants to signify employers' one-stop benefits shop. Its medical plans cover nearly 10 million people. UnitedHealth Group – second largest health insurer in the US, it operates through four business segments and offers a variety of health care plans and services.

Sources: Company website, Hoovers.com, and Morningstar.com