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A big Arnold donor has big
business with the state today... but until last night no one knew
exactly how big for the donors involved. Wellpoint Health Systems,
parent of Blue Cross of California, and it's executives have given
$92,400 to Arnold. And the big health insurer is now at the table with
Schwarzenegger's HMO regulator negotiating the biggest health plan
acquisition in history -- a $15 billion buyout by Indianapolis-based
Anthem. The terms have the potential to pay the top executives at the
company over $600 million, according to documents reluctantly produced
only last evening by the California Department of Managed Health Care
under a Public Records Act request by the Foundation for Taxpayer and
Consumer Rights (FTCR). That's right: over one half of a billion
dollars for managed care execs while patients at Blue Cross face bigger
co-pays, higher premiums, reduced access to drugs and more
restrictions. (View the documents at http://www.consumerwatchdog.org/healthcare/rp/rp004344.pdf)

The California Assembly will have an informational hearing on the
acquisition today at 1:30PM where FTCR and others will demand
conditions on the deal that protect patients and scale back the
executive compensation package. Schwarzenegger's Administration,
however, has broken with a decade of precedent set by HMO regulators in
not holding its own public hearings on the acquisition -- and it's the
decision-maker. The public file was, until last night, quite private;
the potential size of the payout has not even been shared with
shareholders in proxy statements. Career bureaucrats at the Department
of Managed Health Care tell us that Schwarzenegger's inner circle has
been pulling strings to protect the confidentiality of Wellpoint
executives - another break with precedent in health plan merger matters
- and to grease the deal so that there is minimal friction and public
input.

Arnold made a promise that he would not take money from groups with
business before the state. At the very least, Arnold must give back the
money he's taken from Wellpoint and it's executives, and swear off
their cash in the future. But he also should have his regulator convene
public hearings too, lest it look like special interests could buy a
half billion dollar perk for less than a hundred grand in campaign cash
to Arnold.