Assembly To Hold Hearing To Investigate Proposed Anthem-WellPoint Health Networks Merger

Democratic Assembly leaders on Thursday ordered a public hearing to investigate the proposed merger between Indianapolis-based Anthem and Thousand Oaks-based WellPoint Health Networks, after state regulators "were set to approve the merger behind closed doors," the Los Angeles Times reports (Salladay, Los Angeles Times, 5/21). Under the proposed merger, announced last October, the combined company, which would use the name WellPoint and have a headquarters in Indianapolis, would have $27.1 billion in assets, 40,000 employees and 26 million members in 13 states. In California, WellPoint provides health insurance for seven million state residents through subsidiary Blue Cross of California. State law does not require a public hearing on the proposed merger, but Insurance Commissioner John Garamendi (D) said that he supports a joint hearing conducted by the Department of Insurance and the Department of Managed Health Care. The state has held public hearings on similar mergers in the past, but DMHC officials said the proposed merger between Anthem and WellPoint is different because the agreement would not limit consumer choice or competition as Blue Cross of California would continue to operate. DMHC officials said that the department will make a decision about the impact of the proposed merger on state residents in the near future (California Healthline, 5/19).

In response to concerns raised by several lawmakers and consumer advocacy groups, Assembly Speaker Fabian Nuñez (D-Los Angeles) formed a special committee to investigate the proposed Anthem-WellPoint merger, although he did not set a hearing date. The proposed merger also requires approval from Anthem and WellPoint shareholders, as well as from regulators in the states in which the combined company would operate. Nine states and the federal government have approved the proposed merger. Garamendi also must approve part of the proposed merger, but on Thursday he said he might wait until after the Assembly committee hearing before making a decision. DMHC has not scheduled a hearing on the proposed merger, but department officials said that they would share with the Assembly committee the "results of our months-long review of how the plan will operate in California," according to G. Lewis Chartrand, chief deputy director of the department. WellPoint spokesperson Ken Ferber said the proposed merger in large part would not affect the operations of Blue Cross of California. Laurie Sobel, a senior attorney with Consumers Union, said she questions whether the combined company would continue to provide coverage for California Medicaid beneficiaries and whether Anthem understands the state's HMO regulations (Los Angeles Times, 5/19).