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WellPoint, Inc. is the largest health plan company in the Blue Cross and Blue Shield Association
Blue Cross and Blue Shield Association
The Blue Cross Blue Shield Association is a federation of 39 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 100 million Americans. The history of Blue Cross dates back to 1929, while the history of...

. 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.

Express Scripts, the United States' third largest Pharmacy Benefit Management
Pharmacy Benefit Management
In the United States, a Pharmacy Benefit Manager is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. They also are responsible for developing and maintaining the formulary, contracting with pharmacies,...

 organization, is expected to officially close the transaction in the second quarter of 2009.

Company description


WellPoint is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

; the Blue Cross and Blue Shield licensee for Colorado
Colorado
Colorado is a U.S. state that encompasses much of the Rocky Mountains as well as the northeastern portion of the Colorado Plateau and the western edge of the Great Plains...

, Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...

, Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...

, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...

, Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...

, Maine
Maine
Maine is a state in the New England region of the northeastern United States, bordered by the Atlantic Ocean to the east and south, New Hampshire to the west, and the Canadian provinces of Quebec to the northwest and New Brunswick to the northeast. Maine is both the northernmost and easternmost...

, Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...

 (excluding 30 counties in the Kansas City
Kansas City, Missouri
Kansas City, Missouri is the largest city in the U.S. state of Missouri and is the anchor city of the Kansas City Metropolitan Area, the second largest metropolitan area in Missouri. It encompasses in parts of Jackson, Clay, Cass, and Platte counties...

 area), Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...

, New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 (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
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...

 (excluding the Northern Virginia suburbs of Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....

), Wisconsin
Wisconsin
Wisconsin is a U.S. state located in the north-central United States and is part of the Midwest. It is bordered by Minnesota to the west, Iowa to the southwest, Illinois to the south, Lake Michigan to the east, Michigan to the northeast, and Lake Superior to the north. Wisconsin's capital is...

; and through UniCare
UniCare
Unicare is an American health insurance company owned by Wellpoint, Inc.The company announced on October 28, 2009 that it was exiting the Illinois and Texas markets....

. In addition to Blue Cross, the company also operates under the Anthem name.

WellPoint's corporate "political action committee
Political action committee
In the United States, a political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect political candidates or to advance the outcome of a political issue or legislation. Legally, what constitutes a "PAC" for purposes of regulation is a...

" (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
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...

, whose party opposes the health care reform
Health care reform
Health care reform is a general rubric used for discussing major health policy creation or changes—for the most part, governmental policy that affects health care delivery in a given place...

 enacted, and 25 percent was given to Democratic candidates. 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.

Quality of care


In the California Healthcare Quality Report Card 2011 Edition, Anthem received 2 out of 4 stars in Meeting National Standards of Care.

Cancellation of policies


In July 2008, WellPoint subsidiary Anthem Blue Cross agreed to a settlement with the California Department of Managed Health Care
Department of Managed Health Care
The Department of Managed Health Care is a regulatory body governing managed health care in California. The Interim Director is Edward G. Heidig.The DMHC forms part of the California Business, Transportation and Housing Agency...

. 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 debt
Medical debt
Medical debt refers to debt incurred by individuals due to health care costs and related expenses.Medical debt is different from other forms of debt, because it is usually incurred accidentally or faultlessly...

s 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." 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.

Health care reform


In August 2009, WellPoint’s Anthem Blue Cross
Anthem Blue Cross
Anthem Blue Cross is a major US health insurance provider which is a subsidiary of insurance giant Wellpoint. Anthem has about 800,000 customers, and has more individual policyholders in California than any other insurer. It is an independent licensee of the Blue Cross Blue Shield Association...

 unit, the largest for-profit insurer in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

, contacted its employees and urged them to get involved to oppose the Democratic Party
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...

-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 last week. 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
Jerry Brown
Edmund Gerald "Jerry" Brown, Jr. is an American politician. Brown served as the 34th Governor of California , and is currently serving as the 39th California Governor...

 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.

The former Vice President for Public Policy and External Affairs at WellPoint, Elizabeth Fowler, is currently the Senior Counsel to Max Baucus
Max Baucus
Max Sieben Baucus is the senior United States Senator from Montana and a member of the Democratic Party. First elected to the Senate in 1978, as of 2010 he is the longest-serving Senator from Montana, and the fifth longest-serving U.S...

, the chairman of the Senate Finance Committee and leading opponent of the "public option" in health care reform.

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.

In March 2010, WellPoint announced it was reclassifying some of its administrative costs as medical care costs in order to meet new loss ratio
Loss ratio
In insurance, the loss ratio is the ratio of total losses paid out in claims plus adjustment expenses divided by the total earned premiums. For example, if an insurance company pays out $60 in claims for every $100 in collected premiums, then its loss ratio is 60%.Loss ratios for property and...

 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.)

Premium increases


In 2009, Anthem Health Plans of Maine, a WellPoint subsidiary, sued the state of Maine for the right to increase premiums further. 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.

In February 2010, WellPoint announced that its Anthem Blue Cross
Anthem Blue Cross
Anthem Blue Cross is a major US health insurance provider which is a subsidiary of insurance giant Wellpoint. Anthem has about 800,000 customers, and has more individual policyholders in California than any other insurer. It is an independent licensee of the Blue Cross Blue Shield Association...

unit would raise insurance rates for some individual policies in California up to 39%. This announcement released a firestorm of public criticism. The US Federal and California government regulators are investigating this.

Giving for uninsured


In 2007, WellPoint pledged to spend $30 million over three years, through the company's charitable foundation, to help those who lack health coverage. In March 2010, the Los Angeles Times reported that WellPoint's tax records and website showed that the company gave only $6.2 million. 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.

Further reading

  • 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