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Jun 09, 2004 - 11:15 AM

Wellpoint's Price

by Jamie Court
A big Arnold donor has big business with the state today... but until last night no one knew exactly how big for the donors involved. Wellpoint Health Systems, parent of Blue Cross of California, and it's executives have given $92,400 to Arnold. And the big health insurer is now at the table with Schwarzenegger's HMO regulator negotiating the biggest health plan acquisition in history -- a $15 billion buyout by Indianapolis-based Anthem. The terms have the potential to pay the top executives at the company over $600 million, according to documents reluctantly produced only last evening by the California Department of Managed Health Care under a Public Records Act request by the Foundation for Taxpayer and Consumer Rights (FTCR). That's right: over one half of a billion dollars for managed care execs while patients at Blue Cross face bigger co-pays, higher premiums, reduced access to drugs and more restrictions. (View the documents at

The California Assembly will have an informational hearing on the acquisition today at 1:30PM where FTCR and others will demand conditions on the deal that protect patients and scale back the executive compensation package. Schwarzenegger's Administration, however, has broken with a decade of precedent set by HMO regulators in not holding its own public hearings on the acquisition -- and it's the decision-maker. The public file was, until last night, quite private; the potential size of the payout has not even been shared with shareholders in proxy statements. Career bureaucrats at the Department of Managed Health Care tell us that Schwarzenegger's inner circle has been pulling strings to protect the confidentiality of Wellpoint executives - another break with precedent in health plan merger matters - and to grease the deal so that there is minimal friction and public input.

Arnold made a promise that he would not take money from groups with business before the state. At the very least, Arnold must give back the money he's taken from Wellpoint and it's executives, and swear off their cash in the future. But he also should have his regulator convene public hearings too, lest it look like special interests could buy a half billion dollar perk for less than a hundred grand in campaign cash to Arnold.

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