Details and the proposed buyout's significance in Montana were unclear Wednesday, but state Insurance Commissioner John Morrison said he understands that CIGNA Corp. of Philadelphia plans to buy a controlling stake of the company that owns Allegiance Health and Life Insurance Co. in Missoula.
The purchase would be part of CIGNA's $1.5 billion buyout of the health insurance business of Great-West Life & Annuity Insurance Co. of Denver, which owns an 80 percent share of Allegiance's parent company. CIGNA announced the proposed deal Monday.
But if CIGNA does end up owning an 80 percent share of the Allegiance companies, it shouldn't change anything for Allegiance employees and could improve health insurance products for customers, he said.
“It could actually enhance for us and our customers the benefits we're getting through Great-West,” Visser said, by providing larger networks of health care providers and better deals on prescription drugs. “At the end of the day, it's a benefit.
“But there are absolutely no plans and no one has said anything about changing how we operate,” he added. “It's business as usual for us.”
CIGNA, which writes health insurance or manages health benefits for more than 10 million people, is one of the four largest health insurers in the nation.
It announced plans Monday to buy Great-West Health Care, the health insurance subsidiary of Great-West Life & Annuity Insurance Co.
Great-West Health Care has 3,750 employees and writes insurance that covers 2.2 million people.
CIGNA officials said the company's purchase of Great-West will strengthen CIGNA's position in the West and in the health insurance market selling to small and mid-size employers.
“While it's premature to say what this proposed acquisition will mean in any one state, it's important to note that a primary reason for this transaction is Great-West Health Care's strong presence in the northwestern United States,” said company spokesman Joseph Mondy.
Earlier this year, Great-West Life bought an 80 percent share of Benefit Management Corp., the parent company that controls Allegiance in Missoula.
There was some confusion this week as to whether the CIGNA deal includes a purchase of Great-West's share of Allegiance. But Morrison said Wednesday he was told by CIGNA officials that it did.
If CIGNA is buying a controlling share of Allegiance, Morrison's office would have to approve the deal.
Morrison said his office would review the financial strength of any buyer of Allegiance's health insurance business, to make sure the company will remain solvent and that policyholders would be protected.
“This would be a significant deal in the health insurance market in Montana,” Morrison said. “More competition in the health insurance market has the potential to offer more choices and potentially lower prices.”
Allegiance is one of only three Montana-based companies selling health insurance. The others are Montana Blue Cross-Blue Shield, which controls about 50 percent of the market in Montana, and New West Health Services, both headquartered in Helena.
Allegiance, headquartered in Missoula, employs about 200 people. Until this year, the company primarily managed health care benefits for self-insured companies. It began selling health insurance to small and mid-size companies this year.
Right now, CIGNA has a small presence in Montana, insuring only about 8,000 people.
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