WellPoint Inc.'s acquisition of fellow health insurer Amerigroup will help the company's business in a Medicaid market primed for growth, but it still faces challenges from the health care overhaul's upcoming coverage expansions, according to a Goldman Sachs analyst.
Analyst Matthew Borsch said in a research note he restored a "neutral" rating to WellPoint shares after removing his rating when the insurer said in July it would buy Amerigroup in a $4.46 billion deal. WellPoint completed that deal last month.
Borsch said he sees the acquisition as a positive for WellPoint, in part because Amerigroup is a Medicaid coverage provider that excels at winning new business and has a strong geographic reach.
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