Managed care merger would affect 1.4 million Missourians

The merger would involve WellPoint Health Networks
and Anthem.
Monday, November 3, 2003 | 12:00 a.m. CST; updated 10:14 p.m. CDT, Friday, June 27, 2008

JEFFERSON CITY — The announcement of the $16.4 billion merger between managed care providers Anthem Inc. and WellPoint Health Networks Inc. last week comes at a time when the Missouri Chamber of Commerce says businesses throughout the state are concerned about rising premiums and the availability of health insurance plan alternatives.

“It’s one of the highest priorities our employers have right now — especially the small businesses, which make up most of our membership,” said Missouri Chamber of Commerce spokeswoman Karen Buschmann.

If the Anthem-WellPoint merger goes through, about 1.4 million Missourians might soon receive their health insurance from the country’s largest managed care company.

Missouri is one of 13 states that must approve the merger. Federal antitrust regulators and shareholders of the two companies also must give their blessing to the deal, which they hope to close next summer.

Both companies gained notoriety and criticism in the insurance industry over the past 10 years for their purchase and conversion of Blue Cross and Blue Shield plans from nonprofit to for-profit businesses. Consumer groups have challenged the conversions, saying they haven’t stabilized premiums or helped businesses get the best deals for group coverage.

The Missouri Department of Insurance hasn’t fully determined the impact of the merger on the competitiveness of Missouri’s health insurance market.

“There is some concern that one large company will exert a potentially inordinate amount of influence on the way the entire market flows,” said Missouri Department of Insurance spokesman Randy McConnell.

WellPoint Health, based in Thousand Oaks, Calif., operates four subsidiaries in the state, including Blue Cross and Blue Shield of Missouri. Blue Cross and Blue Shield serves more than 900,000 members in 85 counties throughout southeast Missouri.

McConnell said almost half a million Missourians were served by other WellPoint companies last year, including Healthy Alliance, Blue Choice and Blue Shield and HealthLink.

Together, he said, these subsidiaries makes up more than 30 percent of the health insurance market in the state.

It is questionable whether individuals and businesses will see their premiums rise under the acquisition of all Missouri-based WellPoint companies because of the merger.

Although McConnell said this particular move generally should have no effect on pricing, he acknowledged there’s no guarantee.

For now, not much stands in the way of the merger’s approval by the Missouri Insurance Department.

McConnell said red flags typically go up for regulators if merging companies are combining market shares based on areas where competition exists.

“Because Anthem has no companies in Missouri, the situation is different,” McConnell said.

McConnell said the department will continue reviewing antitrust regulations and conduct a statewide public hearing about the matter before offering final approval.

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