Ahead of the Bell: WellPoint shares rate ‘neutral’
|By The Associated Press|
While poised to grow its
The nation's second-largest insurer also is dealing with a change in leadership at a crucial time, analyst
Giacobbe initiated coverage of the
Giacobbe said in a Wednesday research note that WellPoint's recently completed acquisition of
Insurers and analysts expect that market to grow as the health care overhaul broadens the number of people who are eligible and as states seek out insurers to manage residents who are eligible for both
Starting with enrollment this fall, customers seeking individual coverage and insurance through some small employers will be able to use online exchanges mandated in the overhaul. These exchanges are designed to make comparison shopping easier for customers, and Giacobbe said WellPoint's Blue Cross Blue Shield brand will help the insurer.
But the analyst also said the exchanges will challenge companies like
"Our concern largely stems around WellPoint's need to defend its current individual and small group business and potentially face margin pressure when exchanges go live in 2014," the analyst wrote, noting that the insurer could either lose covered lives to competitors or keep the business but at a lower profit margin.
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