Gov. Jim Gibbons, reacting to the state insurance commissioner’s approval today of the acquisition of Health Plan of Nevada by UnitedHealth Group, expressed concerns about the effects the purchase would have on Nevada residents. The governor’s office released this statement, calling for unspecified consumer protections.

Governor expresses concerns about merger
calls upon attorney general to pursue efforts to PROTECT NEVADA citizens
 
Carson City – Governor Jim Gibbons expressed concerns today about the approved merger between Sierra Health Services and UnitedHealth Group and asked for safeguards to ensure that healthcare in Nevada does not suffer as a result of that merger.

"I am deeply disturbed by some of the potential monopolistic tendencies that can result from this merger and by the constraints in Nevada law that prevented the Insurance Commissioner from acting more forcefully to curb these potential threats," said Governor Gibbons.   "I urge the Attorney General to work with my office to take any and all legal steps to prevent adverse outcomes and will also urge the Justice Department to closely examine the monopolistic potential in their review of this merger.”

Governor Gibbons initiated a series of hearings on the merger and welcomed the input of the public and of the medical and political community.  "During those hearings, I heard many valid concerns about the potential for higher prices or loss of access to medical care if this merger takes place," Gibbons stated.  "While the Insurance Commissioner was able to require some concessions, I am not convinced that we have enough protections for the public at this time.  We need to take additional steps to ensure that Nevadans are not harmed by this merger."

"The free market works best for consumers when safeguards are in place that prevent monopolistic tendencies from hampering competition.  The Nevada Attorney General and the Justice Department need to examine this merger and take all appropriate steps to ensure that Nevada consumers are protected from the potentially negative consequences that can result when competition is greatly reduced," Gibbons added.

Governor Gibbons noted that in other states, mergers of this size have included a number of concessions from the merging companies to ensure that the newly created companies do not take advantage of their increased market share by charging much higher premium rates or by reducing payments to healthcare providers, which can result in a loss of doctors.  For example, when UnitedHealth Group acquired Pacificare Life and Health in California, the insurance commissioner required that the company not pay any dividends to the parent company to ensure that premiums were not raised to cover the merger costs and also required that the company protect consumers by waiving preexisting conditions periods in some circumstances.  In Colorado, UnitedHealth was required to fund a liaison between the medical community and the insurer to address physician concerns caused by a similar merger.

Gibbons noted that healthcare costs and access to health care are major concerns in Nevada, and he pledged to work with the Attorney General and other officials to ensure that all legal safeguards are implemented to protect consumers and providers.

"Both in public hearings and in meetings with advocates and opponents of this merger, I have heard many concerns about this merger’s impact on consumers, as well as advantages to the merger," Gibbons concluded.  "I share many of the concerns, and I will work with other public officials to ensure that we take steps to address them while making sure that we obtain the benefits promised by UnitedHealth."

On the one hand, we’re surprised: We thought that Gibbons had simply called for hearings (and even attended them) simply for show. He’s a Republican, after all, and Republicans usually don’t mind when giant corporations merge to form even larger and more powerful corporations. This statement shows that Gibbons actually does get that near-monopolies created by the vaunted free market aren’t always good.