Feb 7, 2012 7:01 PM by Melissa Anderson (Helena)
Montana's third largest health insurance provider, New West, is looking to streamline its services as part of a government anti-trust settlement.
About 8,600 customers of New West may soon be changing over to PacificSource Health Plans of Oregon.
The transfer agreement of 25% of its clients would only include New West's non-Medicare customers to PacificSource.
New West already transferred five of its hospitals' 10,700 members over to Blue Cross-Blue Shield of Montana in January.
New West's CEO David Kibbe says it is not a financially driven transfer, but rather a chance to focus only on the Medicare portion of the industry; he noted, "This change is part of a larger effort on our part to focus on Medicare business, Medicare Advantage and Medicare supplemental business."
The office of the MT Commissioner of Securities & Insurance wants to make sure the insurance companies will provide the same level of service that customers signed up for.
Financial records and quarterly statements showed both companies have more than enough money to pay claims with reserves.
The state's chief insurance financial examiner, Steve Matthews, said, "I haven't seen any reason that the transaction can't be approved."
Testimony by both CEOs of New West and PacificSource assured the commissioner that the change in assets would not immediately impact health insurance customers services or products.
"We think in the long run it is a very good move that consumers in Montana, particularly for the members of New West," testified PacificSource CEO Ken Provencher.
Besides operating in Oregon, PacificSource also sells insurance products in Idaho, Washington, and Montana, totaling 273,000 members.
They hope to expand their business and use the new clients from New West as a stepping stone.
"It gives us a very strong base to really jump-start our presence and make us a very viable competitor in the market," said Provencher.
If approved, the transfer of reinsurance could take affect as early as March 1st, with New West being completely out of the picture by 2013.