$1.5M insurer deal to transfer members approved

A $1.5 million deal between Oregon insurer PacificSource and Montana insurer New West Health Services is moving forward after a key Montana official offered preliminary approval.

Under the proposed deal, New West would transfer about 8,600 non-Medicare customers to PacificSource Health Plans of Oregon. New West's CEO David Kibbe clarified at a hearing Tuesday before the Montana Commissioner of Securities & Insurance that the transfer isn't financially driven, reported KLXH. "This change is part of a larger effort on our part to focus on Medicare business, Medicare Advantage and Medicare supplemental business," Kibbe said.

PacificSource said it hopes to use the new members it would gain under the deal as a stepping stone to expand its business. "It gives us a very strong base to really jump-start our presence and make us a very viable competitor in the market," PacificSource CEO Ken Provencher said at the hearing.

The PacificSource-New West deal is the last major step in an antitrust settlement involving New West, the six hospitals that financed New West, PacificSource and Blue Cross Blue Shield of Montana. Last year, five of the six hospitals said they would transfer coverage of their 10,600 employees to Blue Cross, but the U.S. Department of Justice determined the $26 million deal would have transferred too much business to Blue Cross and undercut competition. Federal and state justice departments reached a settlement, limiting the Blue Cross sale and requiring New West to sell its commercial business to another company, reported the Billings Gazette.

New West already transferred 10,700 members to Blue Cross in January, reported the Associated Press. If approved, the PacificSource transfer could take effect in March, KLXH noted.

To learn more:
- read the Billings Gazette article
- see the KLXH article
- check out the Associated Press article

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