Advertisement

Archive for Monday, January 14, 2002

Blue Cross policyholders approve Anthem deal

January 14, 2002

Advertisement

— Policyholders of the state's largest health insurance company have approved its acquisition by an Indiana firm.

Blue Cross-Blue Shield of Kansas announced the results of voting Monday. The company said 63.4 percent of the policyholders who voted favored the deal with Anthem Insurance Companies Inc. of Indianapolis.

"This affiliation will not only result in a huge infusion of money into the Kansas economy, but also is the best way to guarantee the continued existence of a strong, well-managed Blue Cross-Blue Shield company in Kansas," said John Knack, Blue Cross president and chief executive officer.

Blue Cross and Anthem needed the approval of Blue Cross policyholders because they own the Kansas company. Anthem would pay $370 million, with up to $321 million going to policyholders.

Blue Cross said the vote was 63,504 policyholders in favor of the acquisition and 36,618 against. The 100,122 who voted represented about 58 percent of the 172,038 eligible to vote.

The acquisition would convert Blue Cross from its status as a mutual company into one owned by stockholders. Anthem already operates formerly independent Blue Cross plans in eight other states.

The change in ownership structure has been one of the biggest issues in the deal. Some critics worry that Anthem will have to increase premiums or cut services to earn a profit.

Anthem officials have said they can use administrative efficiencies that do not affect policyholders to keep down costs.

The deal still needs the approval of Insurance Commissioner Kathleen Sebelius. She had a three-day hearing earlier this month and plans to make a decision by late February.

"It's our hope she will see the merits of our position concerning the conversion and will render a positive decision for us," Knack said.

Blue Cross-Blue Shield of Kansas covers 715,000 Kansans, or one-third of the population in 103 of 105 Kansas counties. Johnson and Wyandotte counties are served by Blue Cross-Blue Shield of Kansas City.

Blue Cross-Blue Shield of Kansas also administers health care to about 800,000 people under Medicare and Medicaid contracts.

Anthem provides Blue Cross-Blue Shield insurance to 7.5 million people in Colorado, Connecticut, Indiana, Kentucky, Maine, Nevada, New Hampshire and Ohio.

Four advocacy groups, the Kansas Medical Society, the Kansas Hospital Association, the Kansas State Nurses Association and the Kansas Association for the Medically Underserved, testified against the merger at the hearings earlier this month.

Commenting has been disabled for this item.