Business
Conn. insurance commissioner approves United-Health Net deal
■ Other regulators' decisions are still pending for the sale that members of organized medicine say will reduce competition.
By Emily Berry — Posted Dec. 16, 2009
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Connecticut Insurance Commissioner Thomas R. Sullivan and New Jersey Banking and Insurance Commissioner Neil Jasey have approved UnitedHealthcare's purchase of Health Net's Connecticut membership, but other required approvals are pending.
Connecticut Attorney General Richard Blumenthal said in a statement following the insurance commissioner's announcement that he was still reviewing the acquisition. New York and federal regulators also must approve the deal before it can be finalized.
The proposed sale would give United renewal rights to Health Net membership in Connecticut, New Jersey and New York in exchange for as much as $630 million. United would pay Health Net $350 million up front and as much as $280 million over the next two years, depending on how many of Health Net's 578,000 members in the Northeast become insured by United.
Sullivan, in a decision released Dec. 4, said in a statement that the acquisition was in the best interest of Health Net policyholders because the alternative would mean Health Net would pull out of the market, leaving members to find a new insurer.
Connecticut State Medical Society Executive Vice President Matt Katz was critical of the decision. "The Dept. of Insurance has made it clear by this decision that they value insurance companies over patients and physicians," he said in a statement. The group had testified against the acquisition at a Nov. 23 public hearing.
Henry Allen, senior attorney for the AMA's Private Sector Advocacy unit, testified at the hearing, saying the state's market is already concentrated, "and a merger between United and Health Net would significantly increase that level of concentration."
According to a study commissioned by the AMA, the deal would reduce the number of large health plans to four companies that would control 93% of the state's market.
Jasey's order, signed Nov. 30, was not posted publicly. At this article's deadline, the Medical Society of New Jersey had not commented on the deal or Jasey's decision.
