By Nathalie Tadena
The Department of Justice said Amerigroup Corp.'s (AGP)
divestiture of its Virginia operations ensures continued
competition in the markets for Medicaid managed-care plans in
Northern Virginia, and addresses the department's concerns about
WellPoint Inc.'s (WLP) proposed acquisition of the health-benefits
provider.
Amerigroup in September agreed to sell its Virginia business to
not-for-profit health provider Inova. The deal came about a month
after the DOJ inquired about Amerigroup's Virginia operations as
part of the antitrust review of WellPoint's $4.46 billion
acquisition plan.
The DOJ said Wednesday it has closed its investigation into the
sale of Amerigroup Virginia to Inova. The DOJ said the merger
between Amerigroup and WellPoint, as originally proposed, would
have substantially lessened competition in the provision of
Medicaid managed care plans in Northern Virginia as WellPoint and
the Amerigroup are the only two providers of Medicaid managed-care
plans in that area.
WellPoint, the second-largest managed-care firm by membership
after UnitedHealth Group Inc. (UNH), is buying Amerigroup as the
insurance sector increasingly looks for exposure to growing
government-based health programs like Medicaid, which covers the
poor. The deal for fast-growing Amerigroup will make WellPoint the
biggest Medicaid insurer and may help it compete for Medicaid
patients who also qualify for Medicare.
Amerigroup shares were up by eight cents to $91.76 in recent
trading, while WellPoint shares were off by 19 cents to $54.78 in
recent trading.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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