Insurance worries

Wednesday, Aug. 29, 2007 | 10 p.m.

Nevada Insurance Commissioner Alice Molasky-Arman has essentially rubber stamped a merger between two health insurance companies, paving the way for a virtual monopoly in Southern Nevada.

Molasky-Arman and Gov. Jim Gibbons, who questioned the merger between UnitedHealth Group and Sierra Health Services, say she was constrained by the state law, which largely sacrifices consumer protection for expanding the tax base by making it easier for businesses to operate here.

That may be the case, but we think the commissioner still could have gone much further than she did.

It's clear to us that the deal would lessen competition and create a de facto monopoly. Even Molasky-Arman admits as much, saying the deal might create such a situation at least as far as the Medicare market. However, instead of demanding the companies divest parts of the business or rejecting the deal completely -- either of which could have been acceptable -- the insurance commissioner punted. She said she would defer to the Justice Department on the antitrust issue and ordered only a few paltry changes to the deal in the name of consumer protection.

As reported Tuesday by Marshall Allen in the Las Vegas Sun, Assemblywoman Sheila Leslie, D-Reno, said the decision has “lots of big holes.” She is correct. For example, the order calls for companies to continue and “build on” charitable and philanthropic giving but never explains what that means.

“Does it mean $1?” Leslie asked. “This is laughable.”

Larry Matheis, executive director of the Nevada State Medical Association and a critic of the deal, said the commissioner looked at the deal “from what she is charged with, the narrow frame of state insurance law.”

Gibbons has said he is “not convinced” the state has “enough protections for the public,” which is an understatement. The Legislature should pass stronger consumer protection and antitrust laws when it meets in 2009.

Unfortunately, that will be too late for Nevadans who will end up with little choice for medical insurance if national giant UnitedHealth is allowed to take over Sierra.

We hope federal authorities will be able to step in where state regulators failed and protect Nevada consumers by rejecting this merger.