Anthem, Wellpoint complete $16.5 billion deal

/ Source: The Associated Press

Just hours after winning approval from Georgia, Anthem Inc. and WellPoint Health Networks Inc. announced the completion of a $16.5 billion merger creating the nation's largest health insurance company.

Georgia was the last state to sign off on the merger. The state's insurance commissioner withheld his approval until the companies pledged $126.5 million to improve rural health care in that state. WellPoint Health Networks Inc. owned Blue Cross Blue Shield of Georgia.

California's insurance commissioner also had rejected the agreement until the companies in early November raised to a total of $265 million their pledge to boost health care in that state.

No other states have sought such concessions, said Larry Glasscock, Wellpoint's new chief executive, on Tuesday.

The company will call itself Wellpoint Inc. and be based in Anthem's hometown of Indianapolis. It will cover about 28 million people in 13 states, about a quarter of whom live in California.

Glasscock said the new company would use its resources to help fight rising health costs and "to reduce the disparities in health care" in other states served by its Blue Cross subsidiaries.

He stopped short of saying that customers might see reduced premiums, but did say he believed the new company had the financial resources to slow the rate of increases.

Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights in Los Angeles said the millions of dollars to improve health care in two states was "chump change" compared with executive payouts that were part of the deal and the premium increases customers could face to cover the merger's financing costs.

Anthem, the corporate parent, renamed itself WellPoint Inc. and will begin trading under the WLP symbol on Wednesday.