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WELLPOINT WON'T RUN PLAN.

Byline: Ben Sullivan Daily News Staff Writer

Facing opposition from several congressional Democrats, WellPoint Health Networks has withdrawn from an agreement to run a California child health insurance program.

In a letter to state administrators sent Friday but made public Tuesday, WellPoint said it would not run the program, stating it disagreed with changes the state wanted to make in its contract.

Last week, four members of the state's congressional delegation asked the Clinton administration to reject a plan for WellPoint to run the insurance program, claiming it was a conflict of interest for the company to administer the program and compete to provide health care services to it.

``It's an obvious conflict of interest to have a health plan both running and participating in the state program,'' the congressmen wrote to the Clinton administration. The congressmen are U.S. Rep. Fortney ``Pete'' Stark, D-Fremont; Rep. Bob Matsui, D-Sacramento; Rep. Henry Waxman, D-Los Angeles; and Rep. George Miller, D-Pleasant Hill.

In response, the state reportedly proposed several changes to the contract to further ensure that no conflicts of interest occurred. But those changes would make it too costly for WellPoint to run the program profitably, the Woodland Hills-based company said.

``This mandates us to duplicate our administrative resources, making it cost prohibitive,'' the company wrote.

WellPoint said it still hopes to provide insurance coverage to the program as one of several participating health plans.

Last year, Clinton and Congress passed legislation that would provide several billion dollars to states to provide health insurance to poor children. California will get about 20 percent of this year's money, or around $850 million, if the Clinton administration approves its plan.

As administrator, WellPoint would have enrolled children, collected premiums and assigned children to various participating health plans. Stark and the other congressmen argued that as administrator WellPoint would have been able to direct sickly - and thus, more costly - children to other plans while sending the healthiest children to its own plan.
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Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Date:Mar 11, 1998
Words:328
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