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December 02, 2004 at 07:00 PM
One California Health Deal Starts As Another Closes
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PacifiCare Health Systems Inc. has started an acquisition just as a neighbor, WellPoint Health Networks Inc., has completed a deal of its own.
PacifiCare, Cypress, Calif., is acquiring the group health operations of Pacific Life Insurance Company, Newport Beach, Calif., through a coinsurance deal. The price is not available.
The deal includes Pacific Lifes group health, medical stop-loss and short-term disability businesses, and it also includes much of Pacific Lifes group life and group dental operations. Pacific Life is keeping some small specialty lines, long-term disability operations and experience-rated life and dental accounts.
Pacific Life does not break out separate group health performance figures, but the group insurance unit as a whole generates about $1 billion in annual revenue from 140,000 health plan members. The unit has been selling group health through 11 regional offices, 110 group reps, and a network of 30,000 agents and brokers in 30 states. Many customers are small groups.
PacifiCare says it is making the deal to increase sales to individuals and small groups, and to take advantage of the shift toward account-based health plans and the relatively light competition in the individual and small group markets.
PacifiCare also is acquiring American Medical Security Group Inc., Green Bay, Wis., a carrier that caters to the individual and small group markets. AMS shareholders approved that deal shortly after PacifiCare announced the Pacific Life deal.
