By: Health Insurance
Submitted: 2009-12-17 12:08:48 | Word Count: 432
The Connecticut Department of Insurance has approved UnitedHealth Group's acquisition of Health Net of the Northeast, leaving the future of nearly 1,000 jobs in limbo.
The decision was condemned on Friday by the Connecticut State Medical Society, which expressed concern that the takeover harms competition and leaves health care consumers little protection.
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In July, UnitedHealth and Health Net announced the deal, worth more than $500 million. United has confirmed that the deal does not include the nearly 1,000 workers Health Net has in Connecticut, with the vast majority in Shelton, but has not discussed potential job losses. United employs nearly 4,000 in the state.
One of the issues the medical society raised Friday was that United is buying the right, but not the obligation, to re-enroll Health Net's customers in its UnitedHealthcare insurance coverage.
"United has snuck in the back door in an unprecedented transaction by purchasing only the renewal rights of Health Net customers. We hope they will offer insurance to all of Health Net's current policyholders," said Matthew C. Katz, executive vice president of CSMS. "Time will tell whether the company uses its muscle to continue to raise premiums. Now, they won't need any approval to do so. By purchasing the renewal rights to contracts, they can double their rates and cherry-pick commercial contracts, and there's not a thing state regulators can do about it. The Department of Insurance has made it clear by this decision that they value insurance companies over patients and physicians."
"We appreciate the Connecticut Department of Insurance approving our application to acquire Health Net of Connecticut, confirming that the transaction meets all state regulatory requirements," Daryl Richards, UnitedHealthcare's public relations vice president in Hartford, said in an e-mail. "If fully approved by the other states, we will work to ensure a smooth transition process for members, physicians, hospitals, and other health care professionals. We look forward to advancing the health and well-being of Health Net's members through affordable, quality health care options."
The Insurance Department will require the companies to file regular updates for the next two years. Health Net is to maintain accounts with its employees through 2010 under the terms of the acquisition, which will close later in 2010.
