Garamendi Opposes PacifiCare-UnitedHealth Merger
Insurance Commissioner John Garamendi (D) on Tuesday said that he would oppose the proposed $8.1-billion merger of PacifiCare Health Systems with UnitedHealth Group unless he received assurances that the deal would not result in increased premiums for state residents, the Los Angeles Times reports.
Garamendi suggested that UnitedHealth pay a penalty if customer complaints increase after the merger and that the company invest in community health programs. Garamendi also voiced concerns about the executive payouts and the effect the merger could have on the state's managed care system.
Garamendi can deny approval of insurance mergers if he thinks they will be harmful to consumers, the Times reports. If Garamendi does not approve the merger, state officials said the merger could proceed but could have to go through court hearings, according to the Times.
UnitedHealth spokesperson Mark Lindsay said the company still expects the deal to be finalized by the end of the year (Vrana, Los Angeles Times, 11/2).