WellPoint to Negotiate for Colorado Health Plan

WellPoint Health Networks in Thousand Oaks has signed a letter of intent to negotiate for the purchase of QualMed Plans for Health of Colorado Inc.

QualMed, a subsidiary of Foundation Health Systems, has about 100,000 medical members and is the seventh-largest health maintenance organization in Colorado.

“Colorado is an attractive state that offers excellent potential for growth,” said Leonard D. Schaeffer, WellPoint’s chairman and chief executive officer. “We see opportunities to complement QualMed’s HMO product offerings with a broad array of PPO products, particularly in the individual and small group market segments.”

The letter of intent obligates WellPoint and Foundation Health Systems to negotiate in good faith to execute a mutually satisfactory agreement. Any transaction will be subject to various conditions, including the receipt of all necessary regulatory approvals and other customary closing conditions.

If a purchase agreement is reached, the transaction is expected to close in the second half of 1999.

WellPoint Health Networks is one of the nation’s largest publicly traded managed-care companies. The company has 6.9 million medical members and about 25 million specialty members nationally through Blue Cross of California and UNICARE.