Anthem completed its $16.4 billion acquisition of WellPoint Health Networks, becoming the nation's largest health insurer with 28 million members, and renamed itself WellPoint. UnitedHealth Group, the next largest health insurer, has 22 million members. The deal was completed several months later than the companies initially hoped after it ran into trouble with California and subsequently Georgia. The last major hurdle was cleared today when Georgia Insurance Commissioner John Oxendine approved the acquisition after Anthem agreed to spend $126.5 million over 20 years on a new rural health initiative in the state. Oxendine approved the deal in June without requiring financial concessions but later rescinded his order when the insurers pledged $100 million to California to appease regulators there. California Insurance Commissioner John Garamendi approved the deal this month after the insurers boosted their pledge to $265 million.
In Georgia, Anthem agreed to help rural health centers expand and upgrade equipment by purchasing their bonds and other debt instruments, an investment of $100 million over the next 20 years. Anthem also agreed to provide $11.5 million to finance telemedicine centers at 36 rural hospitals or clinics and four teaching hospitals, and to include telemedicine as a covered benefit, an expected cost of $5 million per year over three years. WellPoint covers 3.1 million Georgia residents. Anthem and WellPoint originally expected to close their deal by July 1. Since Garamendi's approval, the insurers have been communicating with regulators in other states to complete the transaction. At deadline, it was not known whether Anthem had made financial pledges to any of the eight other states that must approve the deal. -- by Laura B. Benko