Elevance Health, Inc. is an American health insurance provider. Prior to June 2022, Elevance Health was named Anthem, Inc. Anthem is one of the largest health insurance companies in the United States, serving over 47 million members across the country. The company was founded in 2004, but its roots go back to the 1940s when it was known as Blue Cross of California. In 1996, Blue Cross of California merged with Blue Shield to form WellPoint Health Networks Inc., which later became Anthem, Inc. in 2014.
Anthem offers a wide range of health insurance products and services, including medical, dental, and vision coverage, as well as prescription drug coverage and behavioral health services. The company also offers Medicare and Medicaid plans and works with employers to provide group health insurance coverage to their employees.
Anthem’s mission is to improve the lives of the people it serves and the health of its communities by delivering innovative solutions and personalized care. The company is committed to providing high-quality, affordable health insurance and to promoting healthy lifestyles and disease prevention through its wellness programs and community outreach initiatives.
Anthem is headquartered in Indianapolis, Indiana, and has a workforce of over 70,000 employees nationwide. The company is dedicated to creating a diverse and inclusive workplace and is recognized as one of the Best Places to Work for LGBTQ Equality by the Human Rights Campaign.
Founding History of Anthem
Anthem is a health insurance company in the United States that was founded in 1940 as a mutual insurance company called “The Associated Group” in Indianapolis, Indiana. The company was created by a group of 37 medical professionals who wanted to provide affordable and accessible health insurance to their patients.
Initially, the company offered health insurance plans to employees of the participating medical groups, but soon expanded to include individuals and small businesses. In 1964, the company changed its name to “Anthem Insurance Companies, Inc.” and became a publicly traded company in 2001.
Throughout its history, Anthem has undergone several mergers and acquisitions that have expanded its reach and influence in the health insurance industry. In 2004, Anthem merged with WellPoint Health Networks, Inc., creating the largest health benefits company in the United States at the time. The company changed its name to “WellPoint, Inc.” following the merger but continued to use the “Anthem” brand for its insurance products.
In 2014, the company announced that it would be changing its name back to “Anthem, Inc.” to better align with its core business and brand identity. Since then, Anthem has continued to grow through acquisitions and strategic partnerships, expanding its presence in the health insurance market.
One of the most significant acquisitions in Anthem’s history came in 2017 when the company acquired Cigna Corporation, another major health insurance provider, for $54 billion. However, the merger was ultimately blocked by the U.S. Department of Justice, which argued that the deal would result in decreased competition and higher prices for consumers.
Today, Anthem is one of the largest health insurance companies in the United States, serving millions of members across the country. The company’s mission is to improve the health of the communities it serves by providing access to affordable, high-quality healthcare.
Major Mergers and Acquisitions of Anthem
Anthem, Inc. has undergone several mergers and acquisitions throughout its history, each of which has played a significant role in shaping the company’s growth and influence in the health insurance industry. Here are some of the major mergers and acquisitions that Anthem has completed:
WellPoint Health Networks, Inc. (2004): This merger was a significant moment in Anthem’s history, as it created the largest health benefits company in the United States at the time. The combined company had operations in 13 states and served approximately 28 million members. The merger also gave Anthem a stronger presence in the California market, where WellPoint was based. The combined company continued to use the “Anthem” brand for its insurance products, but changed its name to “WellPoint, Inc.” following the merger.
Amerigroup Corporation (2012): Anthem’s acquisition of Amerigroup Corporation was part of its strategy to expand its Medicaid and Medicare businesses. Amerigroup was a managed care company that specialized in serving low-income individuals and families, with operations in 13 states. The acquisition allowed Anthem to increase its Medicaid membership by more than 4 million members and strengthen its position in the government-sponsored health insurance market.
Simply Healthcare Holdings, Inc. (2015): This acquisition was part of Anthem’s strategy to expand its Medicaid and Medicare businesses in Florida. Simply Healthcare Holdings was a managed care company that focused on serving Medicaid and Medicare beneficiaries in the state. The acquisition allowed Anthem to increase its Medicaid membership in Florida by more than 300,000 members and expand its product offerings in the state.
HealthSun Health Plans, Inc. (2017): Anthem’s acquisition of HealthSun Health Plans was another move to strengthen its presence in the Florida market. HealthSun was a Medicare Advantage provider that served more than 40,000 members in Miami-Dade and Broward counties. The acquisition gave Anthem a stronger foothold in the Florida market and expanded its Medicare Advantage offerings.
Cigna Corporation (2017): Anthem’s attempted acquisition of Cigna Corporation was one of the largest proposed mergers in the health insurance industry. The merger would have created the largest health insurance company in the United States by membership, with approximately 53 million members. However, the deal was ultimately blocked by the U.S. Department of Justice, which argued that the merger would result in decreased competition and higher prices for consumers.
These mergers and acquisitions have helped Anthem to grow and expand its product offerings, but they have also been subject to scrutiny and criticism from regulators and consumer advocates. Critics argue that consolidation in the health insurance industry can lead to decreased competition and higher costs for consumers, and that mergers and acquisitions can result in disruption and uncertainty for members.
Different Plans of Anthem
Anthem offers a range of health insurance products to individuals, employers, and government programs. Here are some of the major products that Anthem offers:
Individual and family plans: Anthem offers a variety of health insurance plans for individuals and families who do not receive coverage through an employer. These plans are available both on and off the health insurance marketplace and offer a range of coverage options, including high-deductible plans, PPO plans, and HMO plans. Members can choose from a variety of deductible, copayment, and coinsurance options to customize their coverage.
Employer-sponsored plans: Anthem offers a range of health insurance plans for employers of all sizes, including small businesses, mid-size companies, and large corporations. These plans are designed to help employers attract and retain talented employees by offering comprehensive health benefits. Anthem offers a range of plan options, including PPO plans, HMO plans, and high-deductible plans, as well as dental, vision, and life insurance coverage.
Medicare Advantage plans: Anthem offers Medicare Advantage plans, which are health insurance plans that are available to people who are eligible for Medicare. These plans offer comprehensive coverage that includes medical, prescription drug, and additional benefits, such as dental and vision coverage. Members can choose from a variety of plan options, including HMO plans and PPO plans, and can customize their coverage to meet their individual needs.
Medicaid plans: Anthem offers Medicaid plans in several states, providing coverage to low-income individuals and families who are eligible for Medicaid. These plans offer comprehensive coverage that includes medical, dental, and vision benefits, as well as additional benefits such as transportation and access to wellness programs. Anthem also offers specialty Medicaid plans, such as those for people with chronic conditions or disabilities.
Pharmacy benefits management: Anthem operates a pharmacy benefits management (PBM) business that provides prescription drug benefits to members of Anthem’s health insurance plans, as well as to other customers. The PBM business provides services such as drug formulary management, mail-order pharmacy services, and clinical support programs to help members manage their prescriptions and reduce their out-of-pocket costs.
Overall, Anthem’s products are designed to meet the diverse needs of individuals, employers, and government programs, and to provide comprehensive coverage that helps members access the care they need to maintain their health and well-being.
Revenue Streams of Anthem
Anthem generates revenue primarily from premiums collected from its health insurance products, as well as from fees earned from its pharmacy benefits management (PBM) business. Here are some additional details on Anthem’s revenue streams:
Premiums from different markets: Anthem earns premiums from a range of markets, including individual and family plans, employer-sponsored plans, Medicare Advantage plans, and Medicaid plans. These different markets have unique characteristics and requirements, and Anthem tailors its products and services to meet the specific needs of each market. For example, Anthem’s employer-sponsored plans may offer additional benefits such as wellness programs or telemedicine services, while its Medicaid plans may offer transportation services to help members access care.
PBM services: In addition to fees charged for drug formulary management, mail-order pharmacy services, and clinical support programs, Anthem’s PBM business also earns revenue from rebates from drug manufacturers. These rebates are based on the volume of drugs purchased and the negotiated terms of the contracts. Anthem’s PBM business also generates revenue from specialty pharmacy services, which are provided to members who require high-cost or complex medications for conditions such as cancer or multiple sclerosis.
Administrative services: Anthem also generates revenue from administrative services provided to self-funded employer health plans. These plans are funded by the employer and are managed by Anthem on behalf of the employer. Anthem provides administrative services such as claims processing, network management, and customer service to these plans, and earns fees for these services.
Investment income: Anthem’s investment income is generated from its investment portfolio, which includes stocks, bonds, and other financial assets. Investment income can be affected by factors such as changes in interest rates, market conditions, and the performance of individual investments.
Overall, Anthem’s revenue streams are diversified across multiple markets and service lines, which helps to mitigate risks and maintain stable revenue growth. The company’s ability to continue to generate revenue will depend on its ability to adapt to changing market conditions, provide high-quality services to its customers, and effectively manage its costs and investments.
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How Strong is Anthem financially?
Anthem has been performing well financially in recent years, with strong revenue growth and profitability. Here are some key financial metrics for Anthem:
Revenue: Anthem’s total revenue has been steadily increasing over the past few years, from $90 billion in 2018 to $138 billion in 2021. This growth has been driven by increased membership in its health plans, as well as strong growth in its PBM business.
Net income: Anthem’s net income has also been consistently strong, with $3.8 billion in 2018, $4.8 billion in 2019, $4.1 billion in 2020, and $6.2 billion in 2021. This has been driven by strong revenue growth, as well as effective cost management and operational efficiency.
Membership: Anthem’s membership has been growing steadily, from 40 million members in 2018 to 44 million members in 2021. This growth has been driven by increased enrollment in its Medicare and Medicaid plans, as well as growth in its individual and employer-sponsored plans.
Investment income: Anthem’s investment income has been volatile in recent years, with $1.1 billion in 2018, $1.6 billion in 2019, $3.4 billion in 2020, and $1.5 billion in 2021. This volatility reflects fluctuations in market conditions and the performance of Anthem’s investment portfolio.
Overall, Anthem has been performing well financially, with strong revenue growth, profitability, and membership growth. The company’s financial performance has been driven by effective management of its health insurance and PBM businesses, as well as strategic acquisitions and investments in new products and services.
Controversies surrounding Anthem over the years
Anthem has been involved in several controversies over the years, ranging from data breaches to accusations of unethical business practices. Here are some of the most notable controversies surrounding Anthem:
Data breaches: In 2015, Anthem suffered a massive data breach that exposed the personal information of over 78 million customers, including their names, dates of birth, Social Security numbers, and other sensitive information. The breach was one of the largest in history and led to widespread concerns about cybersecurity and privacy. Anthem faced criticism for not adequately protecting its customers’ personal information and for taking too long to notify customers about the breach.
Denial of coverage: Anthem has faced accusations of denying coverage to customers for medically necessary treatments. In 2018, Anthem was sued by a group of patients who claimed that the company was using an algorithm to deny coverage for certain medical procedures, even when those procedures were recommended by doctors. The patients alleged that Anthem’s algorithm was designed to prioritize cost savings over patient care, and that it violated their rights under the Affordable Care Act.
Opioid crisis: Anthem has been accused of contributing to the opioid crisis by failing to adequately monitor the use of prescription opioids by its customers. In 2019, the company was sued by the state of New Hampshire for allegedly failing to properly oversee the prescribing of opioids by doctors and for not taking adequate steps to prevent opioid addiction and overdose.
Medicare Advantage fraud: In 2021, Anthem agreed to pay $90 million to settle allegations that it defrauded the federal government by overcharging for its Medicare Advantage plans. The settlement resolved allegations that Anthem inflated its risk scores, which are used to calculate government payments for Medicare Advantage plans, by submitting inaccurate diagnosis codes for patients.
Overall, Anthem has faced a range of controversies over the years, including data breaches, allegations of unethical business practices, and accusations of contributing to the opioid crisis. While the company has taken steps to address these issues, they continue to be a source of concern for customers and regulators alike.
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