Regarding Anthem’s Acquisiton Of Wellpoint

July 9, 2004

Dear Governor Schwarzenegger,

Since December we have been waiting for the phone call from you that your staff promised us when we tried to hand delivered a letter explaining our situation during your $10,000 per-skybox fundraiser at a Laker’s game.

We will stop by your office later today after your Department of Managed Health Care‘s hearing on the pending WellPoint/Anthem merger. Hopefully, you will give us the same time you and your staff have given to the WellPoint lobbyists.

In case we don’t get in to see you, hear our plea: please intervene on behalf of Blue Cross enrollees like us whose past and future premiums will pay the $4 billion buy-out bill and the $600 million in executive pay-outs in the merger agreement.

While you struggle to restore fiscal health to the State of California, we implore you not to overlook the dire emergency that also exists for Californians struggling to afford health insurance. We have read the statistics about the increasing numbers of the uninsured and count ourselves lucky not be included in those numbers.

That is not to say that maintaining our health insurance has been easy. It has been a struggle as a matter of fact, due in large part to the greedy manipulations going on within Blue Cross. Unfortunately, David who has been ill recently, did not have a choice but to stay with Blue Cross and pay whatever they wanted to charge us.

You see, he was employed by a family business as a successful salesperson for seven years during which time the company paid our medical premiums for the both of us. When the business owner replaced David with a relative in November 2001, he was 62 years of age. Our only recourse was to continue the Blue Cross HMO under COBRA at $663 per month while David commenced a new career as a self-employed small businessperson. Things got tougher about a year later when Blue Cross advised us that our monthly payment would now be $940.50. This notice came in mid-month telling us that our next payment was now this amount! We paid the bill and then cordially notified them that we were under the law entitled to a 30-day notice. They subsequently refunded a small amount to assuage our consternation. Given the profitability of Blue Cross then and now we do not believe that this increase was justifiable both in a business and moral sense.

Since your fundraiser at the Laker game last December, our situation has gotten worse. In June, David’s former employer switched its coverage this month from Blue Cross to Kaiser. After years of paying excessive premiums, Blue Cross dropped David at first opportunity. Now, David has lost access to his physician and hospital of choice, in addition to our money.

Since December, Pat turned 65 and is now on MediCare. Though she no longer must pay Blue Cross‘ excessive rates, it is both of our past over-paid premium dollars that are included in the company’s billion dollar reserves that will be removed from the state if the merger is approved. That money should be refunded to us and to our fellow Blue Cross enrollees.

What angers us even more is the incredibly small number of top executives who figure to split up to $607 million in stock and cash from the pending merger with no logical benefit for policyholders or care providers! This stinks to the high heaven!

We believe the folks in control of the Blue Cross/Anthem are not exercising due diligence and control of costs by transferring enormous amounts of policyholder funding to themselves. This action not only harms us but all current and former Blue Cross enrollees and society at large.

A strong leader must rise to set a proper direction for the HMO industry. And, David voted for you at the recall election of Gray Davis mainly because of his belief that you processed this high quality.

Please, please take this problem under serious consideration, and start by disallowing this merger under the terms that it is now constituted. Your success in this matter will have far reaching implications not only for California but also for the nation.

Sincerely,

Pat & David Parker