WellPoint

Type: Public (NYSE: WLP)
Founded: Anthem Insurance and WellPoint Health Networks merger in 2004
Headquarters: Indianapolis, Indiana, USA
Key people: Angela Braly - President & CEO
Industry: Health Care Plans
Products: Blue Cross Blue Shield
Website: www.wellpoint.com

General Information

WellPoint, Inc. is an independent licensee of the Blue Cross 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.

The Beginning

WellPoint Health Networks Inc. was organized in 1986 as the division responsible for the managed healthcare operations of Blue Cross of California (BCC). BCC was founded in 1937 as a nonprofit corporation whose purpose was to provide residents of California with quality, affordable medical coverage. For nearly 50 years it was successful in this mission. In the mid- 1980s, however, after a tumultuous period when the cost of medical care increased rapidly, the group found itself in precarious financial straits. As company CEO Leonard Schaeffer described the situation in Health Affairs, 'BCC's very existence was threatened.' Blue Cross ran a $55 million deficit in 1986. The sale of its Woodland Hills, California headquarters building provided temporary help, balancing out BCC's 1987 stock market and underwriting losses. In April 1988 Schaeffer announced the worst was past. The following August, however, the group reported second quarter losses of $20.5 million and was only able to stave off insolvency at the end of the year when it found a buyer for its TakeCare HMO and was able to book it at an increased value in company books.