Fitch Affirms WellPoint, Inc.'s IDR at 'A'; Outlook Stable

Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) of WellPoint, Inc. (WellPoint) at 'A' and the Insurer Financial Strength (IFS) ratings of WellPoint's operating subsidiaries at 'AA-'. A full list of today's rating actions can be found below. The Rating Outlook remains Stable.

The affirmation of WellPoint's ratings reflects the company's strong and generally stable historical operating performance, very strong competitive position, and solid statutory capitalization of its operating subsidiaries. Additionally, the IFS ratings of several WellPoint subsidiaries benefit from a parent company guaranty.

The company's ratings also reflect an anticipated debt-to-EBITDA ratio that is higher than average for the health and managed care sector, very strong competition in the commercial health sector, ongoing risks associated with the implementation of health reform legislation, and continued concerns related to unsustainable medical cost trends.

Despite an unfavorable enrollment environment driven by ongoing difficult global economic conditions, WellPoint has continued to produce respectable operating margins and cash flow. During the first three quarters of 2011, the company generated an EBIT margin of 8.4%, compared to 8.8% for the same period in 2010. Fitch anticipates a modest deterioration in the company's operating margins as 2012 unfolds, due at least in part to pressures associated with the minimum MLR regulations of PPACA.

Fitch believes that WellPoint's very strong competitive position is bolstered by the company's right to use the Blue Cross and Blue Shield brands in 14 states. WellPoint has a very strong provider network and has a leading market share in nearly every market in which it uses the Blue Cross and/or Blue Shield brand. In addition, the company's ability to access the provider networks of any other BCBS plan across the U.S. enhances the company's competitive position in the market for large, multi-state employers.

WellPoint's financial leverage as measured by its debt-to-total capital ratio is similar to peers and remains within expectations but has risen modestly to approximately 30% at Sept. 30, 2011, from 27% at June 30, 2011 due primarily to the company's issuance of $1.1 billion in senior notes in August 2011. The company's rolling 12-month debt to EBITDA ratio was approximately 1.9 times (x) at Sept. 30, 2011, which is above average for similarly rated peers and is at the high end of Fitch's expectations for the company's current rating category.

With approximately 34.4 million medical members, Indianapolis-based WellPoint is the nation's second largest publicly traded health insurance and managed care company. The company reported net income of $2.3 billion in the first three quarters of 2011 on total revenues of approximately $45 billion.

The key rating triggers that could result in an upgrade include:

--A material reduction in leverage, specifically expectations for a long-term period of debt/EBITDA below 1.0x;

--Debt/total capital below 20% and EBITDA/interest above 12x;

--Run-rate EBIT margins in excess of 10%;

--Run-rate consolidated RBC ratio in excess of 320% of CAL.

The key rating triggers that could result in a downgrade include:

--Run-rate EBIT margin less than 6.8%;

--Run-rate EBITDA/interest of less than 7x;

--Run-rate debt/EBITDA ratio in excess of 1.9x and debt-to-total capital in excess of 35%;

--Run-rate consolidated RBC ratio of less than 220% of CAL;

--Acquisition activity that increases financial leverage above the guidelines referenced above or otherwise adversely affects WLP's operating profile.

Fitch affirms the following ratings:

WellPoint, Inc.

--6.800% senior notes due 2012 at 'A-';

--5.000% senior notes due 2014 at 'A-';

--6.000% senior notes due 2014 at 'A-';

--5.250% senior notes due 2016 at 'A-';

--5.875% senior notes due 2017 at 'A-';

--2.375% senior notes due 2017 at 'A-';

--7.000% senior notes due 2019 at 'A-';

--4.350% senior notes due 2020 at 'A-';

--3.700% senior notes due 2021 at 'A-';

--5.950% senior notes due 2034 at 'A-';

--5.850% senior notes due 2036 at 'A-';

--6.375% senior notes due 2037 at 'A-';

--5.800% senior notes due 2040 at 'A-';

--Short-term IDR at 'F1';

--Commercial paper at 'F1'.

Anthem Insurance Companies, Inc.

--9.00% surplus notes due 2027 at 'A'.

Anthem Holding Corp. (formerly known as WellPoint Health Networks Inc.)

--6.375% senior notes due 2012 at 'A-'.

Fitch affirms the following ratings with a Stable Outlook:

WellPoint, Inc.

--Long-term IDR at 'A'.

Anthem Insurance Companies, Inc.

--Long-term IDR at 'A+';

--IFS at 'AA-'.

Anthem Holding Corp. (formerly known as WellPoint Health Networks Inc.)

--Long-term IDR at 'A'.

HealthKeepers, Inc.

Blue Cross of California

Anthem Blue Cross Life & Health Insurance Company

Blue Cross and Blue Shield of Georgia, Inc.

Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.

HMO Missouri, Inc.

Empire HealthChoice HMO, Inc.

Empire HealthChoice Assurance, Inc.

Anthem Health Plans, Inc.

Anthem Health Plans of Kentucky, Inc.

Anthem Health Plans of Maine, Inc.

Anthem Health Plans of New Hampshire, Inc.

Anthem Health Plans of Virginia, Inc.

Community Insurance Company, Inc.

Matthew Thornton Health Plan, Inc.

Rocky Mountain Hospital & Medical Service, Inc.

Healthy Alliance Life Insurance Company

--IFS at 'AA-'.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'2012 Outlook: U.S. Health Insurance and Managed Care' (Dec. 14, 2011);

--'Insurance Rating Methodology' (Sept. 22, 2011;)

--'WellPoint, Inc.' (Sept. 6, 2011).

Applicable Criteria and Related Research:

2012 Outlook: U.S. Health Insurance and Managed Care

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=659847

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

WellPoint, Inc.

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=650230

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