The acquisition also would have resulted in a 94 percent controlling stake of the Medicare Advantage health insurance market in the Las Vegas area had the U.S. Department of Justice not required United to divest assets of its Medicare Advantage business as a stipulation for approval of the acquisition.
United and Sierra were the first and second largest sellers of Medicare Advantage plans in the Las Vegas area, which include approximately 82,000 people enrolled in the plans. United is the largest health insurer in the U.S., reporting revenues of approximately $75 billion. Sierra is the largest health insurer in the Las Vegas area, reporting revenues of $1.9 billion.
Under the settlement between United and the DOJ to allow the acquisition to proceed, United must attempt to sell the assets related to its Medicare Advantage business to Humana Inc. If the two payors cannot come to an agreement, United will be required to find another purchaser.
“This divestiture ensures that senior citizens and others will continue to benefit from competition between sellers of Medicare Advantage products,” says Thomas O. Barnett, assistant attorney general in charge of the DOJ’s Antitrust Division, in a DOJ statement. “We are committed to preserving competition in the health insurance industry because this competition spurs insurers to lower prices, enhance services, and offer innovative new products.”
