Rating Agencies Weigh In On WellPoint%2DWellChoice Deal

Eventually, the strategy of keeping "legacy systems" could prove to be unwieldy, but, so far, WellPoint has faced no major integration problems, Moody's says.

S&P analyst Joseph Marinucci is calling the WellChoice deal "an excellent strategic fit" for WellPoint.

"But it exposes WellPoint to operational and financial risks," Marinucci says.

One risk that slowed the Anthem-WellPoint deal was opposition by consumer groups and state officials who wondered if that deal would be good for the people of California.

WellPoint and WellChoice already have announced that New York, which owns the majority of WellChoice stock, will get about $2 billion in cash and the same amount in stock in connection with WellChoice deal.

The WellChoice deal probably will not face the kinds of regulatory concerns that arose in California, Marinucci says.

Fitch analysts say they still have concerns about integration.

Although Anthem and the old WellPoint both were successful at integrating acquired Blues plans over the past few years, the challenges of integrating Anthem and the old WellPoint and integrating WellChoice could cause problems, Fitch says.

"The ratings also reflect the competitive pressures in several of [WellPoint's] markets, driven by price competition, increasing medical costs trends, and the evolving regulatory and political environment affecting the health insurance and managed care industry," Fitch says.