The Indianapolis insurer agreed to buy Amerigroup in July for $4.9 billion, a move that will boost its presence in the Medicaid market. Bloomberg reported that interim CEO John Cannon sent a memo to employees Thursday that said the reorganization would create business units for Medicare, Medicaid, commercial and individual insurance, and specialty insurance including dental, vision and disability.
Amerigroup’s CEO, James Carlson, will lead the company’s Medicaid business, according to Bloomberg.
As baby boomers age and become eligible for Medicare, and as Medicaid coverage expands under Obamacare, insurers have been making moves that will grow these parts of their businesses. Cigna bought HealthSpring last year for $3.8 billion to expand its Medicare presence, and Aetna purchased Coventry Health Care for $5.7 billion in August.
Former WellPoint CEO Angela Braly resigned in August under investor criticism that followed lower-than-expected earnings and cut forecasts, and the company is currently searching for a new CEO.
WellPoint shares were up 2 percent on Thursday.