Justice Dept. sues to block UnitedHealth's proposed merger; UnitedHealth agrees to conditions

The Justice Department on Monday moved to block UnitedHealth Group Inc.'s proposed $2.6 billion acquisition of Sierra Health Services Inc., saying UnitedHealth must sell portions of its business first to ensure competition.

UnitedHealth, which is based in Minnetonka, Minn., said late Monday it would agree to those conditions.

The Justice Department's antitrust lawsuit filed in U.S. District Court in Washington cited concerns that the merger would reduce competition in the Medicare health insurance market in Nevada.

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The department's proposed settlement, which must be approved by the court, asks that UnitedHealth sell portions of its Medicare Advantage business in the Las Vegas area for the merger to proceed. Justice officials said the new company otherwise would control 94 percent of the Medicare Advantage market in that area.

"This divestiture ensures that senior citizens and others will continue to benefit from competition between sellers of Medicare Advantage products," said Thomas O. Barnett, assistant attorney general in charge of the department's antitrust division.

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In a statement, UnitedHealth said it was agreeing to sell its individual SecureHorizons Medicare Advantage HMO plans in Nevada, which represent approximately 25,000 members, and was moving forward to complete the deal.

"We look forward to building on our shared heritage of providing consumers access to affordable, high-quality health care," said Ken Burdick, CEO of UnitedHealthcare, a unit of UnitedHealth.

Sierra Health Services Inc., based in Las Vegas, is the largest health insurer in the Las Vegas area.