California Insurance Commissioner John Garamendi said a pending $16 billion merger between Anthem and WellPoint Health Networks is "not in the best interest" of the state and indicated he might withhold approval of the deal.
Garamendi doesn't have the ability to fully block the proposed merger but could complicate matters by denying Anthem's request to buy WellPoint's 6.7 million-member Blue Cross of California subsidiary.
Of 11 states that have a say over portions of the merger, California is the only one that has yet to grant approval. In a hearing before a joint state Assembly-Senate committee on the deal, Garamendi expressed concern that the merger would harm access to care and damage Blue Cross' bottom line by resulting in millions of dollars in cash and stock payments to WellPoint's top executives.
According to a company document released earlier this week, WellPoint plans to pay from $147 million to $356 million in retention bonuses and severance pay once the merger closes.
