NU Online News Service, April 7, 2003, 10:23 a.m. EDT – WellPoint Health Networks Inc., Thousand Oaks, Calif., says it is giving up on its efforts to acquire CareFirst Inc., Owings Mills, Md.
WellPoint, a large California managed care company, offered $1.37 billion for CareFirst, the parent company of the Blue Cross and Blue Shield companies in Delaware, Maryland, Northern Virginia and the District of Columbia, in November 2001.
Under Maryland law, CareFirst is a nonprofit company that holds its assets in trust for the people of the state. CareFirst offered to compensate the people of Maryland by using the proceeds from the sale to WellPoint to create a new health care charity.
But consumer groups persuaded Maryland Insurance Commissioner Steven Larsen that the price WellPoint was offering for CareFirst was too low. Larsen also agreed with the consumer groups that the deal might hurt Maryland consumers’ access to affordable health care. Larsen rejected WellPoint’s bid March 5.
WellPoint “has decided not to appeal the Maryland insurance commissioner’s decision disapproving the proposed conversion of CareFirst Inc. to for-profit status,” the company says in a statement about its decision.