Shelly Stoddard

Shelly Stoddard, an analyst with S&P, notes that HealthNow's competitive strengths include "strong brand equity and a comprehensive product portfolio."

She says western New York already has seen increased competition in the past few years.Recent competitive pressures, she explains, have included national entrants , among them United , offering Medicare Part D products as well as aggressive pricing practices among competitors.The region also has experienced consolidation among HealthNow's not-for-profit competitors.Stoddard cites the mergers of MVP Health Care and PreferredCare in January 2006 and HIP New York and Group Health Inc. in September 2005.HealthNow, she says, maintains a good competitive position in the market and has the leading regional market share of 48%.

Stoddard predicts that United will bring a strong portfolio to the market that will be competitive with HealthNow's offerings.

The company could reasonably manage this transaction even if financed with the $850 million in debt WellPoint officials estimate may be necessary, S&P analyst Shelli Stoddard said.

S&P's opinion could change if WellPoint is forced to pay much more for CareFirst and the company's percentage of debt to total capital rises above 35 percent.WellPoint's current debt to capital is around 20 percent, Stoddard said.

-From staff and wire reports