WellPoint Health sees costs easing in 2004

Healthcare Purchasing News, Feb, 2004

WellPoint Health Networks Inc., will become the largest HMO in the United States following its merger with Anthem. WellPoint said that easing medical costs have brightened its 2004 outlook. WellPoint officials told investors that it sees the company's cost trends for medical care like hospitals, doctors and prescription drugs dipping below a 10 percent rate of increase this year.

The merger of WellPoint and Anthem, which must be cleared by regulators, shareholders and the Blue Cross Blue Shield Association, would create a company that would insure 26 million people, making it the largest managed care provider in the nation. The announcement is the latest sign that the pace of medical cost hikes is easing. Major U.S. health insurers in recent quarters have reported lower-than-expected medical costs, aided in large part by lower prescription drug spending.