Several states reconsidering Anthem-WellPoint merger

Some regulators are reviewing the permission they gave to the insurers to unite, although the plans say their deal will get done.

By Robert Kazel, AMNews staff. Nov. 15, 2004.

On the heels of California regulators who turned down the proposed Anthem-WellPoint Health Networks merger over the summer, insurance officials in several other states say they are having second thoughts about previous approvals they granted to the $16 billion deal.

Any reconsideration by regulators appears to threaten the merger between Indianapolis-based Anthem and Thousand Oaks, Calif.-based WellPoint. The combination would create the country's largest private health plan.

But WellPoint Health Networks CEO Leonard Schaefer said efforts to close the merger, which would create an Indianapolis-based company called WellPoint Inc., would go on.

Donald J. Palmisano, MD, immediate past president of the AMA, called any new consideration of the merger a "welcome development."

The insurance commissioner of Georgia, John Oxendine, had approved the merger in June. But his office confirmed in October that he had rescinded that approval pending further details about large incentive bonuses to be paid to WellPoint executives, and other concerns, in connection with the deal.

In addition, the Missouri Dept. of Insurance, which also approved the merger, is reconsidering its position on the deal due to a $10 million extraordinary dividend requested by HealthLink HMO, a subsidiary of WellPoint. The state agency must approve extraordinary dividends.

Missouri regulators are seeking to determine if the request conflicts with conditions for the merger previously submitted by WellPoint Health Networks, and whether it is connected to money pledged by WellPoint for patient care in California in its efforts to win approval for the deal in that state.