WellPoint, WellChoice complete merger

With its entry into New York, the nation's largest private health plan begins to push harder for national corporate accounts.

By Jonathan G. Bethely, AMNews staff. Jan. 23, 2006.

The nation's largest health insurer became even bigger when Indianapolis-based WellPoint completed its $6.5 billion acquisition of WellChoice, a move that expands WellPoint into the coveted New York market.

WellChoice is the parent company of Empire Blue Cross Blue Shield of New York. The deal gives WellPoint a greater foothold in the northeast, where it also owns Blues plans in Connecticut, New Hampshire and Maine. But more than that, WellPoint's entry to New York gives it an opportunity to further push its national health plans to corporations, rather than only sell market-by-market.

In fact, soon before the merger closed, WellPoint announced all national accounts business will now be offered under the Anthem Blue brand, as Anthem National Accounts, in its 13 Blues states, a move analysts predicted was predicated by WellPoint's move into the New York market.

"The fact that New York is the largest market in the country for large national employers ties in with our national accounts strategy," said WellPoint spokesman Jim Kappel, adding both companies saw "tremendous" membership growth in national accounts last year. "That was one of the business drivers for bringing our two companies together."

The AMA is skeptical about the WellPoint merger, voicing the same concerns it raised last month as UnitedHealth and PacifiCare consolidated amid outcries from both the AMA and the Colorado Medical Society that the deal posed critical concentration issues in several markets.