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State blocks Anthem's takeover of Kansas Blues plan

Industry watchers say this is the first time a proposed merger has come this far, only to be rejected.

By Myrle Croasdale, amednews staff. March 4, 2002.

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Doctors in Kansas are breathing a little more freely these days, following the state insurance commissioner's rejection of Anthem's request to buy Blue Cross and Blue Shield of Kansas, the largest health insurer in the state.

"We're pleased," said Allison Peterson, spokeswoman for the Kansas Medical Society. "We felt the merger itself held great potential for increased premiums, and we weren't confident that the reasons Blue Cross was seeking a merger were well-founded."

The state nixed the deal because it concluded that privatizing the health insurer would guarantee an increase in small group premiums. The state also said a sale to Anthem would deplete Blues financial reserves.

Peterson said a jump in premiums was a significant threat for Kansas doctors. "Physician offices in our state are little onesie and twosies spread out across rural Kansas," she said. "Their concern was how this would affect their patients and how it would affect them as an employer."

She was confident that the Kansas Blues would remain a viable insurer.

"We weren't convinced that the plan was in trouble and had to be taken over. We're lucky. We have a strong Blue Cross in our state," Peterson said.

Anthem's relationship with doctors in other states has not always been amicable, but Peterson said that was not a central issue.

"We didn't focus that much on the way Anthem has worked in other states," she said. "There's a lot of anecdotal evidence that their past tactics haven't created the greatest relationship with [doctors and hospitals], but that wasn't the crux for us." [...]