Blue Cross merger plan clears Montana hurdle

HELENA (AP) — A proposed merger between nation's fourth-largest health insurer and Blue Cross Blue Shield of Montana has cleared a major regulatory hurdle and is now in the hands of a former state Supreme Court justice.

William Leaphart, the hearing examiner in the merger between Blue Cross and Chicago-based Health Care Service Corp., will make a recommendation to Attorney General Tim Fox and Insurance Commissioner Monica Lindeen now that Lindeen's staff has given the nod to the proposal.

Fox's staff previously recommended approval.

Leaphart will consider those staff recommendations before making his own to Lindeen and Fox, who will have the final say on the deal.

J esse Laslovich, Lindeen's chief legal counsel, recommended the deal Friday after the companies signed a stipulation agreement with several conditions.

Among them, HSCS agreed:

• To create 100 jobs in Montana by the end of 2016.
• To retain all 450 current Montana employees.
• To keep its administrative costs and profit margin lower than Blue Cross Blue Shield's current costs and margin.
• To pay the state's premium tax, which would bring in about $12 million a year the state treasury.
• To allow Montana employees to handle certain coverage disputes by Montana customers.
• To match Blue Cross' past charitable giving of about $200,000 for the next three years and donate an additional $3 million to fight childhood obesity and support children's dental care.
• To make public the salaries of its five highest-paid Montana employees.
• To offer at least 2,000 free vaccinations across the state.

John MacDonald, a spokesman for the companies, told Lee Newspapers of Montana that Blue Cross and HSCS are encouraged by the initial recommendations.

"We believe this alliance is right for Montana. It means strength in numbers, innovative customer service technologies and controlling the rise of premium costs for families and small businesses," MacDonald said.

HCSC is a coalition of Blue Cross plans in Illinois, Texas, New Mexico and Oklahoma with 13 million customers. Blue Cross in Montana is the state's largest insurer with 270,000 customers.