California:
Green Light to "The Outrageous and Extraordinary Greed of Executives"

Nov 22, 2004

Last week, California Insurance Commissioner John Garamendi approved a merger between two of the country’s largest health insurers. Anthem will buy WellPoint, which owns Blue Cross of California, the state’s largest insurer. The 18-billion-dollar deal will create the country’s largest health insurance company.

For more than a year, Garamendi denounced the merger and "the outrageous and extraordinary greed of executives." He estimated that this merger would cost consumers four billion dollars because the companies would increase rates and reduce services to cover the cost of the merger.

After all these bold (and, in fact, truthful) words, however, Garamendi reversed himself, saying Anthem promised not to increase premiums.

A promise! Exactly like Anthem made in 2001 before buying Blue Cross and Blue Shield of Maine–where it is now raising premiums 15%!

Anthem and WellPoint are prime examples of the merger frenzy that has plagued the health-care industry. They have been buying other companies across the country, especially non-profits like Blue Cross, and turning them into for-profit companies. As the health care industry has become more and more concentrated, insurance premiums have skyrocketed, along with the companies’ profits and the outrageous salaries of top executives.

And Garamendi is a prime example of state officials who pretend to regulate an industry while giving it a green light to rape the population!