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Justice Department Requires Divestiture in UnitedHealth Group's Acquisition of Sierra Health Services
Date:2/25/2008

Divestiture in Las Vegas Preserves Competition for Medicare Advantage Plans Sold to Senior Citizens

WASHINGTON, Feb. 25 /PRNewswire-USNewswire/ -- The Department of Justice announced today that it will require UnitedHealth Group Inc. (United) and Sierra Health Services Inc. (Sierra) to divest assets relating to United's Medicare Advantage business in the Las Vegas area in order to proceed with United's acquisition of Sierra. The Department said that the transaction, as originally proposed, would have created a combined company controlling 94 percent of the Medicare Advantage health insurance market in the Las Vegas area and resulted in higher prices, fewer choices, and a reduction in the quality of Medicare Advantage plans purchased by senior citizens in the Las Vegas area.

The Department's Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition. At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the Department's competitive concerns.

Individuals eligible for Medicare, primarily senior citizens, may elect to enroll in a privately provided Medicare Advantage plan instead of traditional Medicare. In establishing the Medicare Advantage program, Congress intended that vigorous competition among private Medicare Advantage insurers would lead insurers to offer seniors more affordable benefits, provide a wider array of health insurance choices, and be more responsive to the demands of seniors. As a result, Medicare Advantage plans offer affordable rates, coverage, and benefits not available through traditional Medicare. Approximately 82,000 people in Clark and Nye counties, which make up the Las Vegas area, are currently enrolled in Medicare Advantage plans, accounting for approximately $840 million of annual commerce.

The original transaction would have eliminated compe
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SOURCE U.S. Department of Justice
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