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Life Health > Health Insurance

WellPoint Rejects Tax Payment Attacks

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NU Online News Service, July 9, 2004, 1:48 p.m. EDT

WellPoint Health Networks Inc., Thousand Oaks, Calif., says it is paying plenty of state taxes in California.[@@]

The Foundation for Taxpayer & Consumer Rights, Santa Monica, Calif., a critic of WellPoint’s efforts to merge with Anthem Inc., Indianapolis, has argued that WellPoint, the for-profit parent of Blue Cross of California, has benefited from special tax breaks and might owe the state $106 million in 2003 gross premium taxes.

“Blue Cross is not exempted from any state taxes that other insurers and health care service plans pay in California,” Thomas Geiser, WellPoint’s general counsel, writes in a letter sent to state Sen. Deborah Ortiz, D-Sacramento, a lawmaker who has been working with the foundation on the merger issue.

California Blue converted to for-profit status in 1996 and has been paying all of the taxes required of any for-profit insurer ever since, Geiser writes in the letter.

In 2003, WellPoint insurance units “paid a total of $89.6 million in taxes to the state of California pursuant to California law, an amount we believe far exceeds the tax payments of any other health insurance company operating in California,” Geiser writes.

The insurance units have paid more than $299.4 million in state income taxes and premium taxes to California in the past 5 years, Geiser writes.

“Our biggest competitor, Kaiser, is tax exempt,” Geiser notes.

WellPoint is making the letter public by disseminating it through a national press release distribution service.


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