Wash. Commissioner Negotiates $2.3M for Health Care Programs

February 6, 2006

Washington Insurance Commissioner Mike Kreidler has negotiated an agreement with UnitedHealth Group to protect the interests of PacifiCare subscribers, providers and the Washington public. The agreement includes a $2.3 million contribution by UnitedHealth Group to Washington’s Health Services Account.

The Health Services Account is used to provide health care for low-income families, senior citizens and the state’s most vulnerable residents. It is funded by the insurance premium tax and taxes on tobacco products and alcoholic beverages.

“Most acquisitions between large corporations primarily serve the interests of shareholders,” said Kreidler. I’m pleased that we were able to come to an agreement with UnitedHealth Group that will significantly benefit the public good.”

PacifiCare of Washington was acquired by UnitedHealth Group of Minnetonka, Minn., in late 2005 in a merger involving 10 states and valued at more than $8 billion nationwide.

The $2.3 million contribution will be deposited into Washington’s Health Services Account as a lump sum payment no later than March 9. The agreement calls for the money to be used for health care programs for the uninsured or under-insured in Washington or for other programs to improve the quality and cost-effectiveness of health care in Washington state.

Kreidler is in discussions with Gov. Christine Gregoire to dedicate the $2.3 million to a health technology assessment program the Governor is requesting in House Bill 2575. Its purpose is to study the use of health technology in programs administered by the state. The desired outcome is “evidence- for-treatment” guidelines and policies for insurance coverage. If implemented, this legislation will help expand access to life-saving health technology while making sure patients are not subjected to unnecessary treatment.

“We have a fundamental responsibility to support access to quality, evidence-based medicine for our citizens and this contribution to Washington’s Health Services account gives us the opportunity to promote health care that works,” said Gov.Gregoire. “I am grateful to Commissioner Kreidler for his hard work and his dedication to responsibly serving the citizens of our state.”

The Office of the Insurance Commissioner will reportedly continue to closely monitor UnitedHealth Group’s integration plans intensively to protect consumers and providers. As part of the agreement, no changes to PacifiCare’s claims payment, provider relations, or systems for processing subscriber questions will change without Kreidler’s approval.

“UnitedHealth’s merger with PacifiCare will benefit Washington’s consumers, doctors and hospitals with health plan options that will better serve the state’s health care marketplace,” said James Frey, regional CEO of PacifiCare, a UnitedHealthcare Company. “We’re committed to deliver quality, affordable health care coverage to the people of Washington and fully support the Commissioner’s commitment to these goals.”

The approved acquisition called for PacifiCare of Washington to be maintained and operated as a separate entity under the UnitedHealth Group ownership for the immediate future.

PacifiCare is estimated to have 70,500 policyholders in Washington. Combined, the two companies have about 7 percent of the health care market in our state.

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