From Morningstar...

"As health reform has taken over as the primary risk keeping managed care investors up at night, WellPoint has remained at the depressed valuations of 2008 despite a stabilization of its medical cost trends. We still think the shares are a bargain, as the market appears to be pricing in an unrealistically pessimistic reform scenario. The biggest threat to the MCOs would be the creation of a government-run insurance program that shares Medicare's administrative infrastructure and below-market provider rates. We don't think such a plan could garner enough votes to overcome a filibuster in the Senate. Most of the other proposals would be neutral to marginally positive for the MCOs, as the potential to add 46 million new customers who were previously uninsured makes up for possible business losses resulting from provisions such as a tax on high-value plans. Additionally, we think investors are protected on the downside by the value of WellPoint's soon-to-be-sold pharmacy benefit management business, its sizeable investment portfolio, and the fact that any legislation is likely to take five years or more to implement, during which time we expect WellPoint to generate significant free cash flows."

http://news.morningstar.com/articlenet/a...