Like all large health insurers Wellpoint (judi online) , which is in the process of changing its name to Anthem, is executing on a five-year plan it doesn’t want to talk about.
That’s because the genesis of that plan, Obamacare, is politically unpopular, at least under that name. But call it the Affordable Care Act (ACA), or use a state exchange name like Kentucky’s Kynect to describe it, and the answer may be different.
Wellpoint publicly opposed the law while it was being debated, but in the end both its power and profit are being enhanced by it. For the quarter ending in September, the company reported earnings of $630.9 million, $2.22 per share, on revenues of $18.4 billion. Adjusted net income was up 12% from a year earlier, and the customer base grew by 259,000 during the quarter, to 37.5 million. It renewed its dividend of 43.75 cents per common share.
Wellpoint operates the Blue Cross Blue Shield plans in many states, and under that name it dominates health insurance markets in 82 of 388 metropolitan markets according to the American Medical Association.
Soon after the ACA was passed in 2010 Wellpoint made acquisitions aimed at controlling its costs, buying Caremore and then Amerigroup, which serve many patients under both Medicare and Medicaid. But when new CEO Joe Swedish came on board last year he publicly disavowed that strategy and has so far kept to that promise.
Swedish came to Wellpoint from the hospital industry, having run Trinity Health in Michigan and, before that, Centura Health in Colorado. He predicted early this year that further consolidation is coming to health care delivery and has put Wellpoint in a position to take advantage of that without putting its own capital into making it happen.
Instead, the company is focused on narrowing consumer choices through agreements like a deal signed in 2012 with Aurora Health Care of Wisconsin, in which patients are given narrow networks under the control of a single hospital group in exchange for lower rates.