Health plan mergers coast-to-coast

by Kristi Park, July 30th, 2007, 3:31 pm

Nevada regulators wrapped up a public-comments session Friday over UnitedHealth’s proposed $2.6 billion acquisition of Sierra Health Services. Those fighting against the merger fear the creation of a health insurance monopoly in the state that would hurt small businesses, raise premiums, and lower reimbursements to providers. The fight over the Sierra/UnitedHealth tie-up echoes what’s going on with another big health care merger farther east. Pennsylvania insurer Highmark has agreed to buy another of the state’s Blue Cross licensees, Independence Blue Cross, in a deal that would give Highmark control of 53% of Pennsylvania’s health insurance market. Not everyone is sanguine about the deal.

State officials in both places would do well to pay attention to the after-the-fact wrangling California is going through with Blue Cross of California, which was acquired by WellPoint in 2004. State regulators signed off on that deal in return for promises that the companies would maintain coverage and refrain from unnecessary premium increases. Blue Cross of California’s actions since that time have made some wonder whether the two companies had their fingers crossed.