California Insurance Commissioner John Garamendi dropped his objections to Anthem's $16.4 billion acquisition of WellPoint Health Networks after Anthem agreed to more than double its previous $100 million offer to improve the state's healthcare system.
The proposed merger, which would create the nation's largest health insurer, has been in limbo since July, when Garamendi blocked a portion of the transaction on the grounds that it would raise costs for Californians while enriching WellPoint executives.
A hearing in Anthem's lawsuit to overturn Garamendi's ruling was set for Feb. 25, 2005.
In a news release, Garamendi said, "After long negotiations, Anthem has made additional concessions and contributions that will assure that California healthcare consumers will realize benefits from this transaction."
Anthem pledged $265 million to the state, including $200 million for general healthcare improvements; $35 million for clinics in underserved communities; $15 million to boost enrollment in public programs such as Medicaid; and $15 million for nurse training.
Garamendi said the nurse training program would yield 1,500 new nurses. Anthem would have to invest more money if executive compensation from the merger exceeds $265 million.