BUSINESSWellPoint acquires its first Blues plan in the MidwestThe merger with RightCHOICE will give WellPoint a stronger presence in the area and 2.8 million more members.By Julie A. Jacob, amednews staff. Nov. 5, 2001. In a move that will give WellPoint Health Networks its first Blues plan in the Midwest, the California-based company has announced plans to merge with St. Louis-based RightCHOICE Managed Care Inc., for $1.3 billion, or $66 per share of RightCHOICE stock. The deal, if approved by state regulators, will boost WellPoint's total covered lives to 12.6 million, making it the fourth largest managed care company in the United States, behind Aetna Inc.; UnitedHealth Group and CIGNA HealthCare. RightCHOICE, which has 2.8 million members in Missouri, does business under the name Blue Cross Blue Shield of Missouri. Its HealthLink subsidiary provides network rental and administrative services. The Missouri Blues merged with its RightCHOICE managed care subsidiary and converted to a for-profit company last year after a lengthy court battle with state regulators and consumer groups. As part of a settlement reached last year, RightCHOICE established a charitable foundation, the Missouri Foundation for Health, which owns 11.1 million shares of stock. That stock will be worth $733 million if the merger goes through. RightCHOICE's chief executive officer, John O'Rourke, will be named head of WellPoint's Midwest Region, which will encompass RightCHOICE, Blue Cross of Missouri, HealthLink and the Midwestern region of Unicare, a WellPoint subsidiary which runs non-Blues plans. WellPoint spokesman Ken Ferber said the company wanted to acquire RightCHOICE because the Midwest is a "key target" for expansion.
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Copyright 2001 American Medical Association. All rights reserved.
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