Part of the report included a sell off of the eye glass business which was completed recently.  During the fourth quarter there was higher usage as many visited the doctor to take advantage of end of year services before a new year of deductibles begins and that happens everywhere just imageabout with both employer and individual accounts.

WellPoint Sells 1-800 Contacts And glasses Subsidiary To Private Equity Firm–Subsidiary Watch

WellPoint is probably the most volatile here with insurance carriers as a large portion of their business compared to others is individual polices and the company is participating nationwide with health insurance exchanges.  They had to do some adjusting and were hit with a fine when it came to how they were handling the algorithms that were dropping policies for clients as well. 

Anthem Blue Cross to Pay $6 Million in Fines for Illegally Dropping Policy Holders–Fixing the Policy Dropping Algorithm Parameters…

As I wrote back in October of 2012, in California this was the status of affairs with doctors accepting patients who purchase their policies  from Covered California..doctors get paid about 30% less than other retail type individual policies.  This with Blue Cross as well as Blue Shield turned into a bit of stink as well as both carriers were working to re-negotiate with doctors are too many were dropping out and what the new agreements are, I don’t know.  Over here today, WellPoint states their pricing model is correct. 

Blue Cross in California Automatically Opts Doctors In for Insurance Exchange Participation And Reimbursement Looks To Be Around 30% Less Than They Receive Now For Individual Policies - Employer Provided Insurance Is Not Affected

This is getting tough to get all the algorithms with both coverage and pricing to come together.  Insurers have been in the driver’s seat for a long time with their risk assessments and models that price policies, however things are changing a bit as that math model is now challenged in areas with Obamacare with providing basic services that policies have to meet with insurance sold via exchanges.  Everyone’s experience from all the way around is being based on how the algorithms come to play and interact with each other..and it’s a complex issue.  I have been talking about that for quite a while now. 

Obamacare for 2014, How In the World Are All Those Algorithms Going To Play Together, World of Complex IT Infrastructures That Are Attached To Almost Every Law On the Books Might Pose Some Issues To Recently Generated House Bills…

The Feds though have provided some re-insurance for carriers for 3 years that participate with insurance exchanges and this is like a safety net and is probably of more interest of course to WellPoint than others since they are again bigger with individual polices than the rest of the insurers.  Some carriers like Aetna have taken out their own re-insurance plans.  Here’s a short run down at the link below that gives a few details on the Fed re-insurance safety net.  BD

Obamacare Re-Insurance: 3 Year Protection Plan Covering Insurers Participating in Health Insurance Exchanges Relative to Catastrophic Claims

(AP) — WellPoint's fourth-quarter earnings tumbled 68 percent, as customers of the nation's second largest health insurer raced to use their coverage last fall before it lapsed due to the health care overhaul.

The Indianapolis company said Wednesday that its medical expenses spiked 18 percent to $14.58 billion due in part to higher use of individual policies in advance of overhaul-mandated changes that unfolded this year.

WellPoint Inc. runs Blue Cross Blue Shield plans in 14 states, and its biggest market, California, did not allow these plans to be continued. The insurer did not say how many of its customers received cancellation notices. It provides individual insurance coverage for about 1.8 million people, or 5 percent of its total medical enrollment of 35.7 million.

WellPoint said results also were affected by a charge it booked for unloading its 1-800-Contacts business and by a higher income tax expense.

WellPoint also said it has received about 500,000 applications for individual coverage, mostly from the overhaul's exchanges and from people who were not WellPoint customers previously.


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