By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Health Insurers are Feeling the Pressure of Looming PPACA
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Health Insurers are Feeling the Pressure of Looming PPACA
BusinessNewsPolicy & Law

Health Insurers are Feeling the Pressure of Looming PPACA

Gary Levin MD
Gary Levin MD
Share
5 Min Read
SHARE


 

In a series of announcements it becomes apparent that things are not well in the health insurance industry.


More Read

medical identity theft
Protect Personal Info from Medical Thieves
Two Truths and a Lie about Physicians and Social Media
One-on-One Cancer Support Empowers Patients
Western Medicine vs. Alternative Medicine in India
Is the GOP Ready to Get Serious About Medicare?

 

In a series of announcements it becomes apparent that things are not well in the health insurance industry.

Wellpoint's headquarters are in Indianapolis.

Shareholders of WellPoint (Blue Shield in California) are griping about a reduction of their dividend by lowering its 2012 adjusted earnings forecast to a range $7.30 to $7.40 a share, down from $7.57 a share (yes, that’s correct….approximately 15 cents/share. Times must be even tougher for them than the uninsured, and unemployed.

Further investigation

Shares of the nation’s second-largest health insurer fell 12% in midday trading, and the disappointing results dragged down shares in other insurance companies.

In contrast, rival UnitedHealth Group Inc. raised its full-year profit estimate when it reported second-quarter results last week.

WellPoint said second-quarter profit decreased by 8%, which also fell short of Wall Street expectations.

The company reported earnings of $643.6 million, or $1.94 a share, compared with $701.6 million, or $1.89 a share, in the same period a year ago. More shares were outstanding in last year’s second quarter.

Enrollment during the quarter ending June 30 dropped 2% to 33.5 million members as WellPoint cited heightened competition in certain markets.

The company said it expects medical costs to rise by about  7.5% for 2012, a slight increase over its previous forecast. Overall, revenue in the quarter ended June 30 rose nearly 2% to $15.4 billion.

Angela Braly, WellPoint’s chief executive, said, “We are disappointed with the need to lower our guidance but believe it is the right action to take given the challenging market we see.”

Later in the day Angela Braly was sacked by the Board of Directors

Angela Braly resigned as CEO under pressure from shareholders

Angela Braly, the chief executive of WellPoint Inc., resigned late Tuesday after intense pressure from shareholders who have been unhappy with the company’s performance.

WellPoint announced that John Cannon, its general counsel, would temporarily fill the CEO role until a replacement is chosen. Cannon is not seeking the role permanently.

WellPoint, one of nation’s biggest insurance companies, is the parent of Woodland Hills-based Anthem Blue Cross.

“Now is the right time for a leadership change,” Jackie M. Ward, the company’s lead director, said in a statement. “We believe the remaining executive team is dynamic and strong, with great potential to drive WellPoint’s future success.”

Shareholders have been vocal in their dissatisfaction with the performance of the company under Braly. They have decried the company’s lagging stock, managerial missteps and disappointing earnings.

Still, the timing of Braly’s resignation is a bit unusual in that WellPoint agreed last month to purchase Medicare provider Amerigroup Corp.for $4.9 billion. It is uncommon for companies undergoing a significant acquisition to change leadership so soon after the announcement of a deal.

The investor unrest follows years of consumer fury that beset WellPointas it repeatedly raised premiums on many families and small businesses by 10% or more. The nation’s second-largest health insurer runs Blue Cross plans in California and 13 other states and has more than 33 million customers nationwide.

A New York hedge fund, Royal Capital Management, sent a letter to WellPoint’s board last week saying that Braly has “failed miserably” as CEO and that “it is incumbent upon the board of directors to fulfill its fiduciary responsibility to shareholders by changing leadership.” Royal Capital, which held about 838,000 shares of WellPoint as of June 30, declined to comment further Monday.

It’s not encouragingto know that Wellpoint’s patients’ welfare is in the hands of hedge fund experts, who are not exactly known for their pristine ethics or morals.

Let’s hope that the  free market enterprise system can self correct to overcome the foolishness of Obamacare.

 

 

TAGGED:health insurance
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

a woman walking on the hallway
6 Easy Healthcare Ways to Sit Less and Move More Every Day
Health
September 9, 2025
Clinical Expertise
Healthcare at a Crossroads: Why Leadership Matters More Than Ever
Global Healthcare
September 9, 2025
travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025

You Might also Like

Those Hospitalized with an Alcohol Related Condition at Risk

June 2, 2011
jeopardy clue tile
Policy & Law

Jeopardy: “I’ll Take Medical Errors For $100,000, Alex!”

December 25, 2012

Athenahealth Explains Why It’s Buying Epocrates (transcript)

January 31, 2013

The Interview: Some Lessons for Healthcare PR

December 29, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?