First went WellPoint, then PacifiCare--is HealthNet the next takeover target?

And then there was one.

Last month's acquisition of Cypress-based PacifiCare Health Systems Inc. by UnitedHealth Group Inc. has renewed speculation about potential suitors for Woodland Hills-based HealthNet Inc., the last sizeable California-based for-profit insurer.

"A second large California player has merged with a large national player and we're just waiting for the third leg to fall," said Anthony Wright, executive director of the consumer action group Health Access California.

Before the PacifiCare purchase was Indianapolis-based Anthem Inc.'s acquisition of Thousand Oaks-based WellPoint Health Networks to create the nation's largest health insurer, pushing Minnetonka, Minn.-based UnitedHealth to No. 2.

CIBC World Markets analyst Carl McDonald notes that insurers that want to enter California's lucrative health care market would rather acquire a local insurer with existing provider relationships than build an operation from scratch.

"HealthNet is the last one and that has made it subject to a lot of acquisition talk," said McDonald, noting that Aetna Inc., Cigna Corp., Humana Inc. and Coventry Healthcare Inc. have been discussed as potential out-of-state partners. A spokesman from HealthNet said the company doesn't respond to market speculation.

HealthNet stock closed up 2 percent to $51.95 a share on Dec. 21, the day the United-Health-PacificCare deal was completed. Though off a 52-week high of $52.92 on Dec. 16, shares have risen 84 percent since the beginning of 2005 and 32 percent since the PacificCare acquisition was announced July 6.

Goldman Sachs analyst Matthew Borsch pointed out in an investor report that Aetna and Cigna would face significant antitrust questions because both do business in the state. He also noted that Humana and Coventry's relatively smaller balance sheets would require them to offer more stock for a deal and risk displeasing shareholders.

"While the best fit for HealthNet would continue to be Aetna or Cigna, in our view an acquisition ... would result in a reduction of local health plan competitors in California," said Borsch.

Meanwhile, there has been concern expressed by physician groups and consumer advocates about the impact of consolidation on quality care.

Dr. Robert Margolis, chief executive of Los Angeles-based HealthCare Partners Medical Group, the state's largest private physician group, argues that the quality, efficiency and relative low cost of the state's managed care system was built on relationships forged by California-based insurers working with local physician groups.

"The concern is that these national plans will eventually try to create standardized, national plans and that will not benefit consumers in California," he said.

Dr. Brian Johnson, who sits on the boards of the California Medical Association and the Los Angeles County Medical Association, noted that while PacificCare spent 85 percent of every premium dollar on health care, UnitedHealth spends only 77 percent.