California insurance chief OKs UnitedHealth-PacifiCare merger | VailDaily.com
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California insurance chief OKs UnitedHealth-PacifiCare merger

LOS ANGELES – California Insurance Commissioner John Garamendi on Monday approved the proposed $9.2 billion union of UnitedHealth Group Inc. and PacifiCare Health Systems Inc.The deal still must receive approval from federal antitrust regulators, stockholders and insurance regulators in other states.Colorado regulators have said the merger will decrease competition in the state but bargaining clout and advances in technology would help keep health care costs down.Dr. Richard May, president of the Colorado Medical Society, said Colorado would be most affected by the merger because UnitedHealth and PacifiCare make up 23 percent of the health insurance business in the state.UnitedHealth’s takeover of PacifiCare would be the second-biggest merger ever in the hospital managed care industry. The stock-and-cash deal would create one of the nation’s largest private health plan providers, with about 26 million subscribers.The companies said the costs of the merger will not be borne by California consumers, and they agreed to commit $250 million in investments and charitable contributions to underserved communities, the commissioner said in a statement.”I expect this merger to go forward,” Garamendi told a news conference.The deal, announced in July, includes $8.1 billion for a stock swap and cash. UnitedHealth also has said it would pay off $1.1 billion in PacifiCare debt immediately after the deal closes late this year or in early 2006.PacifiCare is one of the nation’s largest health groups with nearly 3.2 million members of health plans and about 11.3 million members of specialty plans covering such things as dental care and behavioral health. UnitedHealth currently covers 53.8 million people through medical insurance or insurance programs it manages for other firms.—On the Net:California Department of Insurance: http://www.insurance.ca.gov/UnitedHealth Group: http://www.unitedhealthgroup.comPacifiCare Health Systems: http://www.pacificare.com


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