WellPoint Inc.'s new CEO is slimming the health insurer's business units to two from four as the company prepares for coverage expansions that will hit the market next year as part of the health care overhaul.
The Indianapolis company said Monday after markets closed that its commercial health insurance, the coverage it sells on insurance exchanges and specialty businesses, will be grouped under a Commercial and Specialty Business Division. The insurer's work with government-sponsored programs like Medicaid and Medicare will fall under a Government Business Division.
The federal overhaul aims to expand coverage to millions of uninsured people. Much of that growth will start next year, when people will be able to buy health insurance with income-based tax credits and the state-federal Medicaid program for the poor and disabled people will expand in many states.
CEO Joseph Swedish, who joined WellPoint in March, said he and the company's executive leadership will be focused on analyzing WellPoint's strategic priorities and readiness for 2014.
The changes are incremental and will trim the number of direct reports Swedish receives, said a research note from Ana Gupte, an analyst for the investment research firm Dowling & Partners.
"We would have expected more change and view this as somewhat of a lost opportunity to strengthen the bench and succession slate," Gupte wrote. Most of the company's senior management team is staying. That does remove uncertainty over executive turnover for investors, however, she said.
Shares rose 29 cents to $77.78 Tuesday morning. The stock reached a 52-week high of $78.33 on Monday and has climbed about 27 percent in 2013.