In the new political climate post election, it looks like John Garamendi (California Insurance Commisioner) has taken the latest bribe Wellpoint has put on the table and given his go ahead to its merger with Anthem. There’ll be a press conference later today to confirm the details, but Wellpoint stock is up heavily on the news. Wall Street hasn’t really noticed that a few other states including Georgia have since withdrawn their approval of the merger, but presumably those state officials can be similarly mollified.
It does make you wonder if the bigger California agency that approved the merger earlier, the Dept of Managed Health Care, got all it could for the state’s consumers and taxpayers.
Insurance Commissioner John Garamendi said in a statement he had agreed to drop objections to the deal after Anthem said it would pay $35 million to fund California clinics, $15 million for nurse training and to raise its investment in the state’s “Healthy California” program to $200 million from $100 million.
At least the other insurance commissioners across the nation now know that they can hold out for double the money. But this is all small beer. Wellpoint’s market cap today rose 9% or over $1.5 billion. Presumably Garamendi thought he was going to lose in court. Here’s his version of reality.