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AMA backs conditions on insurance merger

Physician Practice Advisor, November 30, 2005

The American Medical Association (AMA) has urged Colorado to place conditions on the pending merger between UnitedHealth Group, Inc., and PacifiCare Health Systems, Inc.

In testimony before the Colorado state insurance commissioner on November 21, AMA Trustee Edward Langton, MD, cautioned that health insurance consolidation does not benefit consumers. "At a time of escalating healthcare costs and increasing numbers of uninsured, senior executives of PacifiCare stand to gain $315 million in buyouts if this merger is approved," Langston testified. "This acquisition highlights the potential danger that patients' needs will take a back seat to the interests of shareholders."

Many believe that Colorado can insist on conditions for the merger that would set a national standard for fair market conduct by a health insurer. "No other state will be impacted more than Colorado if UnitedHealth is allowed to acquire PacificCare," said Dr. Langston. "The state's approval of the proposed merger must include a set of conditions to ensure that UnitedHealth commits significant funds to improving the infrastructure of the Colorado healthcare system."

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