Anthem/Wellpoint Merger Rejected

[InkAddict]

http://www.bizjournals.com/sanjose/stories/2004/07/19/d...

California Department of Insurance Commissioner John Garamendi on Friday rejected the proposed Anthem/WellPoint merger, stating Californians would have to pay for the $16 billion deal.

Mr. Garamendi made his announcement soon after the California Department of Managed Health Care (DMHC) had approved the merger. The DMHC had negotiated a $122 million investment in California health-care services with Anthem and WellPoint.

"Commissioner Garamendi's politically motivated decision is a clear abuse of discretion that cannot possibly benefit Californians," said Thomas C. Geiser, WellPoint's general counsel.

"To deny this application after eight months of review and receiving approvals from the DMHC, 10 other state regulators, the United States Department of Justice and 97 percent of the outstanding shares of both companies which were voted at separate shareholder meetings, demonstrates that Mr. Garamendi has overstepped his authority as a state insurance commissioner," said Mr. Geiser.

Thank you Mr. Garamendi - Here's what really happens when Blue Cross plans collude under a pretext of lowering consumer costs. It's reminiscent of the Blue Cross of N.E. Ohio's merger with Medical Mutual (Blue Shield). First, the Long-Range System Plans that show lowest cost per claim will be ignored and the higher cost plan will be the surviving entity; next, a very high-cost ad blitz will "convince" consumers of the merits of the merger; then, the lay-offs will begin with employees coerced into waiving their civil rights in order to receive severence along with possible non-compete clauses hindering employees' abilities to obtain employment in the same or similar field. Then the corporate President, that time around, John Burry, will send Christmas greetings to their ex-employees wishing them well just as their severence ends! No, Virginia, there is no Santa Claus this year...nor any year in which the bottom-line is achieved at the expense of employees' careers and security.

Wife of a fully-vested former BCNO employee raises a cheer to Mr. Garamendi, HIP, HIP, HOORAY - Trouble is, corporations usually get what they want one way or another. At least Californian's would only need to foot the bill for one company car (Ferrari).