Editorial: Bad deal for consumers

Friday, June 22, 2007 | 7:51 a.m.

UnitedHealth Group announced in March that it wants to acquire Nevada's Sierra Health Services for $2.6 billion.

Sierra Health covers about 620,000 Nevadans, making it the state's largest health insurer. As a result, the proposed merger is under review by the U.S. Justice Department and the Nevada Insurance Commission, both of which must determine whether the deal would hurt competition.

But more than competition could be at stake. A story by the Las Vegas Sun on Wednesday shows that since 2005 UnitedHealth has amassed millions of dollars in fines for violating insurance regulations in at least three states. The company's missteps have included faulty record keeping and failing to handle complaints.

The story by Sun reporter Marshall Allen says that in December the Nebraska Department of Insurance fined UnitedHealth $650,000 for failing to handle grievances, appeals and complaints.

In March 2006 Arizona state insurance officials fined UnitedHealth $364,750 for delaying payments to medical providers, failing to keep proper records and denying services and claims in violation of state law. And in December 2005, the Sun reports, the Texas Department of Insurance fined UnitedHealth a staggering $4 million for the company's failure to pay promptly, maintain complaint logs and keep accurate claim data reports.

This is the company that wants to run 95 percent of the Las Vegas health maintenance organization market and 56 percent of the Las Vegas Valley's combined HMO and preferred provider market? Rubbish.

As we have said before, we are leery of creating a huge monopoly that, in effect, would squelch competition in Southern Nevada's health insurance market. We cannot see any reason to move forward with this merger, and we certainly cannot understand how Nevadans could benefit from being at the mercy of a company that has had so many recent and significant regulation problems. This deal offers plenty to raise skepticism and offers nothing for us to support.