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WellPoint expands Blues operations into Maryland

Just weeks after announcing it would buy Missouri's RightCHOICE, WellPoint pockets CareFirst in Maryland.

By Myrle Croasdale, amednews staff. Dec. 10, 2001.

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WellPoint Health Networks Inc. is wasting no time buying more Blue Cross Blue Shield plans.

Its newest intended acquisition is CareFirst BlueCross BlueShield, the largest insurer in Maryland. WellPoint plans to pay $1.3 billion for the company after regulatory approval to convert CareFirst to for-profit status.

The Nov. 20 announcement comes a few weeks after WellPoint said it would buy the largest insurer in Missouri, RightCHOICE Managed Care Inc. for $1.3 billion.

Its other acquisition this year was Blue Cross and Blue Shield of Georgia for $700 million.

Regulatory approval for the CareFirst conversion is expected to take 18 months.

Once finished, the deal would push WellPoint's membership to 15.9 million, including the pending purchase of RightCHOICE, making it second only to Aetna Inc. in terms of covered lives. WellPoint, of Thousand Oaks, Calif., also owns Blue Cross of California.

WellPoint will pay $450 million in cash and $850 million in WellPoint common stock, which would go to charitable foundations in CareFirst's three principal areas of Maryland, Delaware and Washington, D.C.

Maryland doctors are not pleased with the proposed acquisition and are against CareFirst giving up nonprofit status. Mike Preston, executive director for the Maryland State Medical Society, said the group would oppose CareFirst's conversion.

"We intend to fight the deal and expect we'll have plenty of company," Preston said, with hospital and consumer groups already lining up to contest the conversion. [...]