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Behind WellPoint Deal, Some History

August 08, 2004

California Insurance Commissioner John Garamendi has earned respect for his rejection of the proposed Anthem-WellPoint merger ("Garamendi Blocks Part of WellPoint Deal," July 24).

In contrast, the California Department of Managed Health Care, led by its new director, Cindy Ehnes, demonstrated again that it prefers to represent the interests of HMOs rather than regulate them as it approved a merger that awards a few executives with about $600 million in bonuses and stock options.

In 1936, the Alameda County Medical Assn. created the Insurance Assn. of Approved Hospitals, a nonprofit mutual prepayment insurance company that was approved by the California Insurance Department, to provide care to indigent patients who were suffering during that time of economic depression.

This insurance company transformed in 1940 to become Blue Cross of California. It is shameful that a nonprofit company, formed by local healthcare professionals to help indigent patients, has evolved into a for-profit company that focuses on earning profits for stockholders and rewarding its executives with obscene compensation packages at the expense of patients and healthcare professionals.

Dr. Vin Sawhney


Alameda Contra Costa

Medical Assn.



Wall Street analysts and others are baffled at why John Garamendi and state Treasurer Phil Angelides would interfere in the merger of two healthcare firms when 10 other states and the Department of Justice have concluded that no harm will come to consumers or investors.

These same analysts are confused as to how these two would-be candidates for higher office can get away with a political holdup that robs investors.

Well, to these analysts, I say welcome to California, where the well-being of businesses, shareholders, taxpayers and ordinary citizens comes second to the well-being of certain political careers.

We voters have come to understand that to Garamendi and Angelides, nothing is as important as getting a little space in the newspaper to keep momentum building for the 2006 election.

Robert M. Brower



Every California taxpayer, employer and governmental unit should be rallying against this money grab.

The billions of dollars to be incurred in acquisition costs and compensation to executives who promote this boondoggle will be borne by policyholders, who are not just families but also private and governmental employers.

When these costs are passed on, governmental services are cut or taxes go up, the cost of doing business in California goes up and current and retired employees lose coverage.

Where is the governor with his promise to cut the cost of doing business? Why is the governor not concerned about all the Blue Cross jobs that will go to Indiana?

Lloyd Dent

Studio City


Only when WellPoint and Anthem's proposals constitute a fair, unprejudiced and reasonable transaction for policyholders should it be approved.

When was the last time the little guy came out ahead in one of these merger fiascos?

Sara Bacon


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