Editorial: Buyout looks even worse

Monday, Sept. 17, 2007 | 7:13 a.m.

Our view on a buyout that would drastically narrow the health insurance market in Southern Nevada has been plain from the time the proposal was announced in March.

We strongly oppose the planned $2.6 billion acquisition of Nevada's largest health insurance provider, Sierra Health Services, by the country's largest health insurance provider, UnitedHealth Group. This is because consumers would be at risk for paying higher premiums and health care providers could face lower reimbursements, affecting their decisions about staying in Nevada.

The news this month that UnitedHealth has agreed to pay up to $20 million in fines to 36 states and the District of Columbia only reinforces our position. The settlement, reached Sept. 6 after three years of negotiations, requires UnitedHealth to pay $12 million immediately and another $8 million if it does not meet benchmarks for improving service to consumers and health care providers by 2010.

The Las Vegas Sun has previously reported on separate fines levied against UnitedHealth by Nebraska, Arizona and Texas. Typical of the company's infractions have been not paying patient claims on time, not calculating deductibles correctly, not abiding by payment contracts with health care providers and delays in considering appeals.

Such a record does not warrant being rewarded with support for a massive expansion that would lead to a near monopoly in Nevada in the health insurance business. Unfortunately, however, Nevada Insurance Commissioner Alice Molasky-Arman approved the acquisition in August, deferring to state laws that give the edge to businesses over consumers.

Hope lies, however, with the Justice Department, which is going beyond a mere review of the proposed merger and is conducting a full investigation. Nevada Attorney General Catherine Cortez Masto has voiced skepticism of the proposal and is also investigating.

New York, which received the largest portion of the settlement, $3.7 million, issued this statement through its insurance department: "New York will aggressively protect consumers ..." We hope that attitude prevails during the investigations of this buyout.