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Elevance Health, Inc. is an American health insurance provider. The company's services include medical, pharmaceutical, dental, behavioral health, long-term care, and disability plans through affiliated companies such as Anthem Blue Cross and Blue Shield, Empire BlueCross BlueShield in New York State, Anthem Blue Cross in California, Wellpoint, and Carelon. It is the largest for-profit
managed health care The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care ("ma ...
company in the
Blue Cross Blue Shield Association Blue Cross Blue Shield Association (BCBS, BCBSA) is a federation, or supraorganization, of, in 2022, 34 independent and locally operated BCBSA companies that provide health insurance in the United States to more than 106 million people. It was ...
. As of 2022, the company had 46.8 million members within their affiliated companies' health plans. Prior to June 2022, Elevance Health was named Anthem, Inc. Based on its 2021 revenues, the company ranked 20th on the 2022 Fortune 500.


History


Anthem

In 1946, Anthem began in Indianapolis,
Indiana Indiana () is a U.S. state in the Midwestern United States. It is the 38th-largest by area and the 17th-most populous of the 50 States. Its capital and largest city is Indianapolis. Indiana was admitted to the United States as the 19th s ...
, as Mutual Hospital Insurance Inc. and Mutual Medical Insurance Inc. The companies grew significantly, controlling 80% of the medical insurance market in Indiana by the 1970s. In 1972, The two firms, then known as Blue Cross of Indiana and Blue Shield of Indiana, entered into a joint operating agreement. In 1985, The two companies merged into Associated Insurance Companies, Inc,, later called, The Associated Group, a
holding company A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
, but usage of the name "Anthem" persisted. In 1989, the company purchased American General Insurance Co. for $150 million and in 1991, it acquired The Shelby Insurance Co., based in
Shelby, Ohio Shelby is a city in Richland County in the U.S. state of Ohio, northwest of the city of Mansfield. It is part of the Mansfield, Ohio Metropolitan Statistical Area. The population was 9,317 as of the 2010 census. History Shelby was originally c ...
, for $125 million. In 1989, The Associated Group founded Acordia, a brokerage that sold and serviced insurance and employee benefit programs. In 1993, Acordia acquired American Business Insurance for $130 million and the Federal Kemper Insurance Company for $100 million. The Associated Group bought Southeastern Mutual Insurance Company, the operator of Blue Cross and Blue Shield of
Kentucky Kentucky ( , ), officially the Commonwealth of Kentucky, is a state in the Southeastern region of the United States and one of the states of the Upper South. It borders Illinois, Indiana, and Ohio to the north; West Virginia and Virginia ...
. In 1994, it sold Raffensperger, Hughes & Co., Inc., Indiana's largest investment bank, to National City Corp. In 1995, The Associated Group acquired Community Mutual Insurance, a provider of Blue Cross and Blue Shield insurance plans in Ohio with over 1.9 million policy holders), then set up Anthem Blue Cross and Blue Shield. In 1996, The Associated Group changed its name to Anthem Insurance Company. In August 1997, Anthem acquired Blue Cross and Blue Shield of
Connecticut Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York to the west, and Long Island Sound to the south. Its capita ...
. It also sold Acordia to management. In 1999, Anthem acquired Blue Cross and Blue Shield of New Hampshire and Blue Cross and Blue Shield of Colorado and Nevada. The acquisitions made since 1996 added 850,000 policy holders. Among its customer base were 2.4 million PPO and 964,000 HMO enrollees. In 2000, Anthem acquired Blue Cross Blue Shield of
Maine Maine () is a state in the New England and Northeastern regions of the United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Canadian provinces of New Brunswick and Quebec to the northeast and ...
. In 2001, In October, Anthem underwent
demutualization Demutualization is the process by which a customer-owned mutual organization (''mutual'') or co-operative changes legal form to a joint stock company. It is sometimes called stocking or privatization. As part of the demutualization process, member ...
and became a
public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...
via an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
, which made it the fourth largest public
managed health care The term managed care or managed healthcare is used in the United States to describe a group of activities intended to reduce the cost of providing health care and providing American health insurance while improving the quality of that care ("ma ...
company in the United States. In 2002, Anthem acquired Trigon Healthcare of Virginia, a Blue Cross and Blue Shield plan, the largest insurer in Virginia, for $4.04 billion. Anthem Insurance Company reached 11.9 million members.


Blue Cross of California

Blue Cross of California was the predecessor of WellPoint Health Network Inc. In 1982, Blue Cross of California was founded with the consolidation of Blue Cross of Northern California (established in 1936) and Blue Cross of Southern California (established in 1937). In 1992, WellPoint was formed to operate Blue Cross of California's managed care business. In January 1993, Blue Cross of California spun off its managed care business into a publicly traded entity, WellPoint Health Networks Inc. Blue Cross of California retained an 80% interest and voting control. In 1996, Blue Cross of California restructured to a
for-profit corporation A for-profit corporation is an organization which aims to earn profit through its operations and is concerned with its own interests, unlike those of the public (non-profit corporation). Structure A for-profit corporation is usually an organization ...
, designating WellPoint Health Networks Inc. as the parent organization. In April 1996, WellPoint completed its acquisition of
Massachusetts Mutual Life Insurance Company The Massachusetts Mutual Life Insurance Company, also known as MassMutual, is a Springfield, Massachusetts-based life insurance company. MassMutual provides financial products such as life insurance, disability income insurance, long term ...
's group life and health insurance subsidiaries for approximately $380 million, making it the second largest publicly held managed health company in the U.S. with 4 million policy holders. In March 1997, WellPoint acquired the group health and life businesses of
John Hancock Financial John Hancock Life Insurance Company, U.S.A. is a Boston-based insurance company. Established April 21, 1862, it was named in honor of John Hancock, a prominent American Patriot. In 2004, John Hancock was acquired by the Canadian multinational li ...
for $86.7 million. With this acquisition, WellPoint expanded its presence into Michigan, Texas, and the mid-Atlantic, and gained a unit that concentrated on serving the needs of large employers. In 2000, WellPoint acquired PrecisionRx, a mail service pharmacy fulfillment center in Texas. In 2001, Wellpoint offered to acquire CareFirst BlueCross BlueShield for $1.37 billion, including $119 million in bonuses to Carefirst executives. In 2003, the offer was rejected by the Maryland insurance commissioner. In March 2001, WellPoint acquired Rush Prudential Health Plans, a Chicago provider, for $204 million. In March 2001, WellPoint acquired Cerulean Companies, the parent company of Blue Cross Blue Shield of Georgia. In 2002, WellPoint acquired RightChoice Managed Care, a Missouri-based company, for $1.5 billion. WellPoint also acquired MethodistCare of Houston, Texas and HealthLink. In 2003, WellPoint acquired Golden West Dental and Vision of Camarillo, California, and Cobalt, including Blue Cross and Blue Shield United of Wisconsin. In November 2004, Wellpoint, Inc. was formed by the merger of Anthem Insurance Company and WellPoint Health Networks Inc. The merger was structured as Anthem acquiring WellPoint Health Networks and renaming itself WellPoint, Inc. WellPoint continued to use 'Anthem' as the brand name under which it operated. It sold its Blue Cross and Blue Shield products in 11 states. In 2005, WellPoint acquired Alexandria, Va.–based Lumenos, a provider of
consumer-driven health care Consumer-driven healthcare (CDHC), or consumer-driven health plans (CDHP) refers to a type of health insurance plan that allows employers and/or employees to utilize pretax money to help pay for medical expenses not covered by their health plan. ...
, for $185 million. Lumenos was the pioneer and market leader in consumer-driven health plans. In December, WellPoint acquired WellChoice, a
New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...
-based Blue Cross Blue Shield provider, for approximately $6.5 billion, making New York the 14th state in which WellPoint is a Blue Cross Blue Shield licensee. In 2007, WellPoint acquired Chicago-based American Imaging Management, a radiology benefit management company that creates software to help physicians choose cost-effective locations for their patients to receive medical imaging tests. WellPoint also acquired Chicago based American Imaging Management (AIM), the leading radiology benefit management company. In January 2008, Leslie Margolin became the president of California operations. She resigned in July 2010. In 2008, WellPoint acquired Resolution Health, a firm that analyzes patient history for potential medical problems such as adverse drug interactions. In 2009, WellPoint acquired DeCare Dental, a dental insurance firm. In 2011, WellPoint acquired CareMore, a
Cerritos, California Cerritos (Spanish for "Little hills") is a city in Los Angeles County, California, United States, and is one of several cities that constitute the Gateway Cities of southeast Los Angeles County. It was incorporated on April 24, 1956. As of 20 ...
-based provider of insurance and care centers for elderly patients. In 2012, WellPoint acquired Amerigroup for $4.9 billion, anticipating significant growth due to Medicaid expansion under the Patient Protection and Affordable Care Act. In August 2012, CEO Angela Braly resigned due to pressure from investors. On August 13, 2014, WellPoint announced it intended to change its name to Anthem, Inc., effective in December. In February 2015, the company acquired Simply Healthcare Holdings, a Medicaid and Medicare managed care company based in Florida. In June 2015, Anthem made an offer to acquire Cigna for more than $54 billion in cash and stock. In February 2017, a
United States district court The United States district courts are the trial courts of the U.S. federal judiciary. There is one district court for each federal judicial district, which each cover one U.S. state or, in some cases, a portion of a state. Each district co ...
ruling blocked the Cigna merger on grounds of
anti-competitive practices Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws differ among state and federal laws to ensure businesses do not engage in competitive practices that harm other, usuall ...
. On February 14, Cigna called off its merger agreement with Anthem. In October 2017, Anthem announced that it would not renew its
pharmacy benefit management In the United States, a pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, ...
(PBM) relationship with Express Scripts saying it had been overcharged $3 billion and that instead, Anthem would eventually handle the PBM process itself through its new IngenioRx unit. Anthem announced that it would enter a 5-year contract with
CVS Health CVS Health Corporation (previously CVS Corporation and CVS Caremark Corporation) is an American healthcare company that owns CVS Pharmacy, a retail pharmacy chain; CVS Caremark, a pharmacy benefits manager; and Aetna, a health insurance prov ...
. Cigna then announced plans in March 2018 to acquire Express Scripts for $58 billion. On November 6, 2017,
Gail Koziara Boudreaux Gail Koziara Boudreaux (born 1960) is an American businesswoman and athlete. In college, she played for the Dartmouth Big Green Women's basketball team from 1978 through 1982. She later served as an executive for a number of companies such as Aetn ...
was named CEO. In 2018, the company announced a $20 million expansion of its headquarters and the signing of a lease in Atlanta for its technology center. In March 2020, Anthem announced the acquisition of Beacon Health Options, and independently held behavioral health organization. On February 2, 2021, Anthem announced the acquisition of InnovaCare Health's Puerto Rico subsidiaries including MMM Holdings, LLC (“MMM”) and its Medicare Advantage (MA) plan MMM Healthcare, LLC as well as affiliated companies and Medicaid plan. In November 2021, Anthem announced the acquisition of Integra Managed Care in New York. The acquisition of the New York-based international health insurance company was completed on May 5, 2022. On June 28, 2022, Anthem announced a change of its corporate name to Elevance Health, Inc. and also changed its stock ticker symbol from "ANTM" to "ELV".


Quality of care

In 2011, in the category of "Meeting National Standards of Care," California's state
patient advocacy Patient advocacy is a process in health care concerned with advocacy for patients, survivors, and caregivers. The patient advocate may be an individual or an organization, concerned with healthcare standards or with one specific group of disord ...
office gave Anthem a rating of 2 out of 4 stars. In 2014, it received 3 out of 4 stars in the same category.


Controversies


Charitable donations

In 2007, WellPoint pledged to spend $30 million over three years, through the company's charitable foundation, to help the uninsured. In March 2010, the ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the U ...
'' reported that WellPoint's tax records and website showed that the company had given only $6.2 million by 2009. The company said that the foundation had indeed fulfilled its $30-million commitment by mid-2009, but refused to provide any financial details to support its claim.


Illegal cancellations

In 2007, the California Department of Managed Health Care (DMHC) investigated Anthem's policies for revoking (rescinding) health care insurance policies. The DMHC randomly selected 90 instances where Anthem canceled the insurance of policy holders who had been diagnosed with costly or life-threatening illnesses, to find how many of these cancellations were legal. The agency concluded that all these cancellations were illegal. In July 2008, Anthem Blue Cross agreed to a settlement with the
California Department of Managed Health Care The Department of Managed Health Care (DMHC) is a regulatory body governing managed health care plans, sometimes referred to as Health Maintenance Organizations (HMOs) in California. The DMHC was created as the first state department in the count ...
; however in doing so, WellPoint did not officially admit liability. To resolve allegations of improper policy rescissions (cancellations), WellPoint paid $10 million and reinstated plans for 1,770 policy-holders who were affected by cancelled policies. The company also agreed to provide compensation for any
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. People do not plan to fall ill or ...
s incurred by these policy-holders. In April 2010, Reuters alleged that Wellpoint "using a
computer algorithm In mathematics and computer science, an algorithm () is a finite sequence of rigorous instructions, typically used to solve a class of specific problems or to perform a computation. Algorithms are used as specifications for performing c ...
, identified women recently diagnosed with
breast cancer Breast cancer is cancer that develops from breast tissue. Signs of breast cancer may include a lump in the breast, a change in breast shape, dimpling of the skin, milk rejection, fluid coming from the nipple, a newly inverted nipple, or a r ...
and then singled them out for cancellation of their policies." The story not only caused considerable public outrage, but it also led Secretary of Health and Human Services,
Kathleen Sebelius Kathleen Sebelius (; née Gilligan, born May 15, 1948) is an American businesswoman and politician who served as the 21st United States secretary of Health and Human Services from 2009 until 2014. As Secretary of Health and Human Services, Sebeli ...
, and President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the ...
, to call on WellPoint to end the practice. In 2011, Anthem began cancelling policies of members who had been paying premiums with
credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...
s, sometimes without calling or emailing the member ahead of time.


Opposition to healthcare reform

In August 2009, Anthem, the largest for-profit insurer in California, contacted its employees and urged them to get involved to oppose healthcare reforms proposed during the Obama administration. Consumer Watchdog, a nonprofit watchdog organization in Santa Monica, asked California Atty. Gen.
Jerry Brown Edmund Gerald Brown Jr. (born April 7, 1938) is an American lawyer, author, and politician who served as the 34th and 39th governor of California from 1975 to 1983 and 2011 to 2019. A member of the Democratic Party, he was elected Secretary of ...
to investigate its claim that WellPoint had illegally pushed workers to write to their elected officials, attend town hall meetings and enlist family and friends to ensure an overhaul that would match the firm’s interests. According to Consumer Watchdog, California's labor code directly prohibits coercive communications, including forbidding employers from controlling, coercing or influencing employees' political activities or affiliations. WellPoint had not been contacted by the California attorney general and had not seen any complaint. Through 2010 and into 2011, WellPoint senior executives met monthly with executives of other major health insurers to blunt the effect of the Patient Protection and Affordable Care Act.


2009 Maine premium litigation

In 2009, Anthem Health Plans of Maine, a WellPoint subsidiary, sued the state of
Maine Maine () is a state in the New England and Northeastern regions of the United States. It borders New Hampshire to the west, the Gulf of Maine to the southeast, and the Canadian provinces of New Brunswick and Quebec to the northeast and ...
for the right to increase premiums further. Since Maine licenses insurance companies through its Department of Insurance, Anthem needed the state's permission to raise rates. The Court disagreed with Anthem and found that, unlike with other forms of insurance, the Maine Insurance Code does not require the Superintendent to consider profits.


2010 California premium litigation

In February 2010, WellPoint announced that rates would increase on some Anthem Blue Cross individual policies in California by as high as 39%. The announcement resulted in an investigation by regulators from the Federal and California governments. Anthem Blue Cross gained worldwide media attention and became a
poster child A poster child (sometimes poster boy or poster girl) is, according to the original meaning of the term, a child afflicted by some disease or deformity whose picture is used on posters or other media as part of a campaign to raise money or enlist ...
for the problem of rising cost of health care in the U.S. The rate increase came one year after Anthem had raised rates 68% on individual policy holders. To explain the rate increases, some which were four times the rate of medical inflation, Anthem said the company had experienced a death spiral: the company claimed that with increased
unemployment Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refere ...
and declining wages, healthy customers dropped their insurance policies. Consequently, the remaining risk pool became sicker and thus more expensive to insure; and, in turn, prices were forced up and pushed more people out of the market. In response to the outrage from politicians and consumers, Anthem postponed the rate increase until May 1, 2010. Senator
Dianne Feinstein Dianne Goldman Berman Feinstein ( ; born Dianne Emiel Goldman; June 22, 1933) is an American politician who serves as the senior United States senator from California, a seat she has held since 1992. A member of the Democratic Party, she wa ...
of California proposed giving the
Federal government of the United States The federal government of the United States (U.S. federal government or U.S. government) is the national government of the United States, a federal republic located primarily in North America, composed of 50 states, a city within a fe ...
authority to block insurance premium hikes that it considers to be "unjustified".


Reclassification of expenses

On 17 March 2010, WellPoint announced it was reclassifying some of its administrative costs as medical care costs in order to meet loss ratio requirements under the Patient Protection and Affordable Care Act, which requires insurers to spend at least 80% or 85% of customer premiums on health care services, depending on the type of plan.


2009–2010 data breach

In June 2010, Anthem sent letters to 230,000 customers in California warning them that their personal data might have been accessed online via a data breach. After a routine upgrade in October 2009, a third-party vendor stated that all security measures had been properly reinstated, when in fact they had not. As a result, personal information of thousands of coverage applicants who were under the age of 65 was exposed in the open. After a Los Angeles-area woman found that her application for coverage was publicly available, she filed a
class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
lawsuit against Anthem. While gathering evidence for the proceeding, the woman's lawyers downloaded some confidential customer information from Anthem's website and alerted Anthem about the breach. According to the lawyers, confidential information had remained exposed for five months.


Denial of benefits

In May 2014, Anthem Blue Cross refused to pay for the hospitalization of a Sonoma County, California man for stage four cancers, although he had paid Anthem over $100,000 in premiums. Anthem ended up paying for coverage following public outcry.


2015 data breach

On February 4, 2015, Anthem, Inc. disclosed that criminal hackers had broken into its servers and potentially stolen over 37.5 million records that contain personally identifiable information from its servers. According to Anthem, Inc., the data breach extended into multiple brands Anthem, Inc. uses to market its healthcare plans, including, Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross and Blue Shield, Amerigroup, Caremore, and UniCare. Healthlink was also victimized. Anthem says the medical information and financial data was not compromised. Anthem has offered free credit monitoring in the wake of the breach. According to
Bloomberg News Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg Tele ...
, China may be responsible for this data breach. Michael Daniel, chief adviser on
cybersecurity Computer security, cybersecurity (cyber security), or information technology security (IT security) is the protection of computer systems and networks from attack by malicious actors that may result in unauthorized information disclosure, t ...
for President
Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the ...
, said he would be changing his own password. About 80 million company records were hacked, stoking fears that the stolen data could be used for
identity theft Identity theft occurs when someone uses another person's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. The term ''identity theft'' was c ...
. The compromised information contained names, birthdays, medical IDs, social security numbers, street addresses, e-mail addresses, employment information and income data. In June 2017, Anthem agreed to spend $115M to settle allegations that it failed to adequately protect the data of its clients, the sum was to be spent on two years of services to protect victims from identity theft. In 2019, two Chinese nationals were indicted for the breach.


Uncovered ER visits

Beginning in 2015, Anthem has been implementing and expanding its "Avoidable ER Program" which means not reimbursing ER visits when the cause is not covered by the company. A few patients found out that they had been stuck with bills of over $10,000 that Anthem refused to reimburse. Unfortunately, even medical experts can't tell an emergency from a non-emergency based on symptoms alone, as described in a 2013 report by the Journal of the American Medical Association. Critics derided the scheme, citing that it was unlawful by federal law to cover a person based on diagnosis, not symptoms. It was also considered unsafe, as it pressured patients to diagnose themselves before going to the ER.


Neglecting complaints

In 2017, the
California Department of Managed Health Care The Department of Managed Health Care (DMHC) is a regulatory body governing managed health care plans, sometimes referred to as Health Maintenance Organizations (HMOs) in California. The DMHC was created as the first state department in the count ...
fined the company $5 million for untimely response to consumer complaints. In 2019, this was settled at $2.8 million.


Harassing Sovereign Health

In 2019, Sovereign Health pressed charges against Anthem, alleging that it was using direct payments to compel them to join Anthem's network under unfavorable terms. Sovereign owns facilities that treat people with addiction and mental health problems. Rather than paying those facilities, Anthem sent checks directly to patients, some while they were still in rehab. This put the burden of compensating the facilities on the patients. It placed the already financially troubled organization in a precarious situation, trying to collect sometimes very large sums of money, from the very people they were trying to help.


Diagnostics fraud

In March 2020, Anthem was sued by the
Department of Justice A justice ministry, ministry of justice, or department of justice is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...
. The lawsuit alleges that Anthem had submitted inaccurate diagnostics data in order to obtain increased Medicare reimbursements. The case was still pending in February 2022.


Finances

For the fiscal year 2017, Anthem reported earnings of US$3.843 billion, with an annual revenue of US$90.039 billion, an increase of 6.1% over the previous fiscal cycle. Anthem's shares traded at over $183 per share, and its market capitalization was valued at over US$69.1 billion in October 2018.


References


External links

* {{Authority control Health care companies established in 1946 Financial services companies established in 1946 Companies listed on the New York Stock Exchange Companies based in Indianapolis Health insurance companies of the United States Health care companies based in Indiana Members of Blue Cross Blue Shield Association Pharmacy benefit management companies based in the United States 2001 initial public offerings