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In Defense of Anthem-WellPoint Deal

June 27, 2004

Your June 17 Golden State column ("What's the Motive in Acquiring WellPoint?") raised serious questions and offered considerable speculation about how the new company to be formed by the merger of Anthem and WellPoint Health Networks would operate in California.

On June 9, Anthem Chairman, President and Chief Executive Larry Glasscock testified at a joint public hearing of the California Senate Insurance Committee and the Assembly Select Committee to Investigate the Merger of California Health Insurance Providers. In addition to giving his testimony, Glasscock answered all questions asked by the committee. He was joined by executives of WellPoint and Blue Cross of California, who also testified and answered questions.

Glasscock specifically addressed, in detail, the very questions raised in your column. Among other things, he described how Blue Cross of California would operate after the merger, assuring that:

* There would be continuity in Blue Cross of California's existing operations and management and that BCC's headquarters would remain in California.

* BCC would retain its current corporate name and would continue to operate as it does now, with a strong local presence and local management easily accessible to customers, hospitals and physicians.

* David Helwig, president of BCC, would continue in his current role.

* We are committed to serving all segments of the California marketplace as BCC has historically done.

* The merger would not change any existing contract terms or benefit packages, and policyholders of BCC would have full continuity of coverage.

* Premiums would not be raised as a result of this merger.

Every time Anthem and WellPoint have completed a Blue plan merger, we have been able to grow membership and reduce administrative expenses, helping keep healthcare affordable for customers. This merger will allow us to continue to do this.

Ed West

Vice President,

Corporate Communications

Anthem Blue Cross

and Blue Shield

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