U.S. Sets Terms for Purchase of Insurer PacifiCare
UnitedHealth Group Inc.’s planned $9-billion purchase of PacifiCare Health Group Inc. will get U.S. approval only if it divests parts of PacifiCare’s business and makes changes to a California agreement, antitrust officials said Tuesday.
The companies will be required to sell portions of PacifiCare’s commercial health-insurance business in Tucson and Boulder, Colo., the Justice Department said.
The department said it also would require UnitedHealth to modify and, after one year, end its network access agreement with CareTrust Networks, a subsidiary of Blue Shield of California.
The acquisition as originally proposed probably would result in higher prices and lower-quality health plans, the Justice Department said.
Calls to spokesmen for PacifiCare and UnitedHealth weren’t immediately returned.
The Justice Department said it filed a civil lawsuit Tuesday in U.S. District Court in Washington to block the proposed transaction, along with a proposed consent decree to resolve the concerns.
Shares of Minnesota-based UnitedHealth rose $1.21 to $63.06. Cypress-based PacifiCare gained $1.77 to $90.81.
On Monday, the California Department of Insurance and the Department of Managed Health Care granted their approval after concessions by UnitedHealth.
State Insurance Commissioner John Garamendi said UnitedHealth, the nation’s second-largest health insurer, pledged to provide $50 million in charitable contributions and $200 million in investments to improve services to low-income people living in communities with little access to quality medical care.
