California Legislators Should Seek Guarantees on WellPoint-Anthem Merger, Editorial States
California Legislators "should seek more binding promises" before deciding whether to "bless or try to block" a proposed $15.5 billion merger between Indiana-based Anthem and California-based WellPoint Health Networks, a Los Angeles Times editorial states (Los Angeles Times, 6/14). The proposed merger, which was announced last October, would combine the companies under the name WellPoint and have headquarters in Indianapolis. The combined company would have $27.1 billion in assets, 40,000 employees and 26 million members in 13 states, including California. California Assembly Speaker Fabian Nunez (D) last month formed a special committee to investigate the proposed merger in response to concerns raised by several lawmakers and consumer advocacy groups that the state Department of Managed Health Care would approve the agreement without a public hearing. State law does not require a hearing, although the state has held public hearings on similar mergers in the past. The proposed merger requires approval from Anthem and WellPoint shareholders, as well as from regulators in the states where the combined company would operate. Nine affected states, as well as the federal government, have approved the proposed merger (California Healthline, 6/10). The editorial says that state lawmakers have voiced "healthy skepticism" that the company might choose not to insure California's Medicaid beneficiaries who are currently covered by WellPoint and could "cherry-pic[k] the cheaper, healthy [policyholders] under cover of a merger." The editorial continues, "If cost-cutting becomes a top priority after the merger, there is little to keep the burden from falling on policyholders." Although legislators do not "have much leverage," they hope that their support of or opposition to the merger will influence shareholders in a vote scheduled for June 28, the editorial states (Los Angeles Times, 6/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.