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December 22, 2014

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Patients cringe as heath insurers try to merge

The proposed takeover of local insurance giant Sierra Health Services by national behemoth UnitedHealth Group would

create a monopoly that's most evident in Nevada's disabled and senior citizen marketplace.

The proposed $2.6 billion deal would allow United, which covers 70 million people nationwide, to absorb the largest health insurance provider in Nevada, Sierra Health, which covers about 620,000 Nevadans, most of them in Clark County.

About 88,000 of those patients are covered by Medicare health maintenance organization plans, funded by the federal government for seniors and the permanently disabled and almost entirely administered by Sierra Health and United.

If the two companies become one, as they hope to do by the end of 2007, it would virtually eliminate Medicare HMO competition in Nevada. According to Nevada's health planning and statistics bureau, United would control 95 percent of the Medicare HMO market statewide, and 100 percent in Clark County.

The acquisition is being investigated by the Justice Department because it raises antitrust concerns. It's also being examined by the Nevada Insurance Commission. Both agencies must approve the deal.

Sierra Health and United officials spin the market-share numbers a different way. At Thursday's hearing before the Nevada insurance commissioner, Sierra Health officials didn't acknowledge the looming monopoly of the Medicare HMO market in an analysis provided to reporters. Instead, they combined the HMO and preferred provider organization numbers, showing a combined share of 36 percent.

The potential HMO monopoly was barely mentioned at the meeting.

But the issue is a primary concern for Lori Spielberg and Shelli Miller, two friends in their early 50s who are permanently disabled and caring for elderly parents.

They point to United's past performance, after it took over PacifiCare in 2005. At that time, United slashed benefits for Secure Horizons, the Medicare HMO run by PacifiCare. When the changes went into effect last January the women switched to Sierra Health's Medicare HMO plan, Senior Dimensions, which they say has more comprehensive benefits with fewer out-of-pocket costs, also known as co-payments. If United takes over Sierra, there will be no competition to keep the company from reducing Sierra's benefits as well, they said.

Spielberg, 50, has battled multiple sclerosis for 25 years and became permanently disabled by the neurological disorder in 2002. She survives on her fixed Social Security income - about 40 percent of which she spends on health care. Her medication alone cost $391 to $488 a month from January through March. In April she paid $10.80 - quitting a $400 monthly medicine she could no longer afford even though it staves off the ravages of MS.

Miller, 53, is a former registered nurse who spent her career in health care administration and consulting, including work with HMOs. She's been permanently disabled for a decade, and her challenging health circumstances, combined with her professional experience, lead her to carefully scrutinize her insurance benefits.

According to United's own analysis, in 2007 - the first year the company controlled PacifiCare's Secure Horizons plan - patients lost benefits and incurred new costs:

Tyler Mason, spokesman for United, said the changes made in 2007 to Secure Horizons reflected realities of health care inflation. Also, he said, some other costs were reduced for patients, such as eliminating all co-payments for the first dozen visits for occupational therapy, physical therapy, cardiac rehabilitation and pulmonary rehabilitation.

The challenge for United is cobbling together available health care dollars to appeal to the broadest number of consumers to take care of their costs, Mason said. It's a trade-off, he said.

If United takes control of Sierra Health, Spielberg and Miller are concerned , the same costly changes could be made to their current Medicare HMO.

Sierra's $1,500 annual out-of-pocket cap alone can save a person from financial ruin if there's a catastrophic health crisis, they said.

Also, Sierra Health is the only Medicare plan - either HMO or PPO - that does not have a gap in prescription coverage, often called a "doughnut hole," that can cost consumers up to $3,850 a year. And Sierra Health's current Medicare plan has a wide selection of generic drugs, and low costs on specialty medications, Spielberg said.

If United "were to leave the Senior Dimension plan the same, that would be great," Miller said. "But if they take and destroy the Sierra plan like they did before, we're screwed."

Sierra Health and United officials say many other insurance companies offer Medicare plans. But Miller and Spielberg point out that, especially for patients dealing with disabilities or catastrophic illnesses, HMO plans are a good option because the Medicare PPOs are more expensive, often costing the patient 20 percent of each visit and service.

Mason, the United spokesman, said there's no way to speculate what changes could come . But it's in United's best interests to please consumers, he said, and other insurance companies can enter the market.

Gov. Jim Gibbons has called for a series of public hearings to discuss the potential effect of the merger. Insurance Commissioner Alice A. Molasky-Arman continued Thursday's hearing and said comments on the merger are still being accepted.

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