Montana Department of Justice
Home / Press Release / Bullock, USDOJ Announce Settlement with Montana Health Insurance Companies
November 8, 2011

Bullock, USDOJ Announce Settlement with Montana Health Insurance Companies

The Montana Attorney General’s Office, in conjunction with the U.S. Department of Justice, today reached a settlement with two of Montana’s three largest health insurance companies over a proposed deal that raised significant antitrust concerns.

The settlement, which involves a deal between Blue Cross and Blue Shield of Montana and the hospitals that own New West Health Services, divides New West services in a way that is intended to preserve competition in Montana’s health insurance sector.

In August, Blue Cross and five of the six hospitals that collectively own New West entered into an agreement in which Blue Cross agreed to pay the hospitals for their collective promise to stop purchasing their own employees’ health insurance from New West and instead buy it from Blue Cross for the next six years.

“Anyone who has ever lost a game of Monopoly knows that prices go up when one player controls most of the board,” Attorney General Steve Bullock said.  “When we learned that Montana’s dominant health insurance company, Blue Cross Blue Shield, was planning to take over a substantial portion of New West’s business, we were very concerned that the reduced competition could lead to higher premiums for Montana consumers.”

New West was created in 1998 specifically to provide options to consumers in a Montana-based insurance market that had historically been dominated by Blue Cross.  By working hard to provide competitive rates and a large and diverse network of doctors and hospitals for its customers, New West did just that.  Today, New West and a small handful of other insurance companies are able to foster competition in the health insurance marketplace.   Were the deal between Blue Cross and the hospitals that own New West to have gone through without intervention, much of the competitive good New West had accomplished would have been undone, Bullock said.

Bullock also cited the most recent Kaiser Family Foundation survey, which found that in 2011, the average total family premium nationwide climbed to over $15,000 a year.  Since the survey began in 1999, worker contributions to health insurance premiums have increased 168 percent, while wages have gone up only 50 percent.
“Montanans simply can’t afford to keep paying a bigger and bigger slice of their income for health insurance,” Bullock said, “so my Consumer Protection staff worked closely with the U.S. Department of Justice to preserve competition in Montana’s marketplace.  New West has been the most significant competitor for Blue Cross.  By encouraging another company to take over a portion of New West’s business here, the settlement will help provide health care consumers a viable option when they are seeking coverage.”

The settlement negotiated by the U.S. Department of Justice and the Montana Attorney General’s Office will enable Blue Cross to purchase from New West only the health insurance policies of the five hospitals’ employees.  It also requires New West to sell all of its remaining business, except for its niche Medicare Advantage business.  PacificSource of Oregon has entered into negotiations to purchase the remaining portion of New West’s business.  In this scenario, the state of Montana preserves insurance market competition and protects consumers from having no real choice.

“The bottom line is that, without some sort of intervention, their agreement would have substantially reduced competition.  As Attorney General, my concern is that the agreement between Blue Cross and the hospitals was an end run around our antitrust laws because, at the end of the day, New West would disappear and no other company would step in to fill that void,” Bullock said.  “Without the effective competition New West provided, it would be even more difficult to have a check on premium increases and quality of service issues.”

Bullock noted that the settlement does not interfere with each of the private insurance firms’ opportunity to increase their businesses.  He also said that the Montana Department of Justice will monitor the situation to assure the settlement achieves its goals.

The joint complaint and settlement documents were filed Tuesday in U.S. District Court in Billings. The settlement is subject to court review and approval.

Resources:

ago-lsd

Attorney General's Office & Legal Services Division

The Attorney General’s Office, headed by Attorney General Tim Fox, and the Legal Services Division function as the lawyers for the State of Montana. The attorneys in the Office have expertise in a wide range of legal topics and handle a broad range of legal cases involving the State of Montana and its people.

Enter Division
ago-lsd

Children’s Justice Bureau

The Children’s Justice Bureau is an agency-wide initiative at the Montana Department of Justice dedicated to IMPROVING how we respond to child victims, DEVELOPING state-of-the-art approaches by keeping up with the newest research and, most importantly, HELPING child victims recover and move on with their lives.

Enter Division
ago-lsd

Forensic Science Division & State Crime Lab

The mission of the Montana Forensic Science Division is to use operationally efficient and financially responsible practices as the laboratory provides accurate, objective, and timely forensic analyses to the criminal justice community in order to maximize value to the citizens of Montana.

Enter Division
ago-lsd

Missing Persons Clearinghouse

The Missing Children Act of 1985 established a Montana Missing Persons Clearinghouse within the Department of Justice. In March 2008, the department implemented a searchable online database that, for the first time, is updated in real time and includes any photos provided by law enforcement.

Enter Division
ago-lsd

Office of Victim Services

The goal of the Office of Victim Services is to provide tools and information to help crime victims recover from their experience and provide them with a range of services available. The criminal justice system can be confusing and intimidating for victims. To assist them as they go through the justice system, the Office of Victim Service is available to answer any questions they may have.

Enter Division
ago-lsd

Central Services Division

The Montana Department of Justice’s Central Services Division provides financial and human resources support for the department. We make sure that everything works for the people Working for Justice. If you’re interested in a rewarding career helping protect the rights and safety of all Montanans, we invite you to join our team of over 800 dedicated employees working across the state.

Enter Division
ago-lsd

Justice Information Technology Services Division

Our Justice Information Technology Services Division (JITSD) provides vital Information Technology (IT) infrastructure upon which Montanans and lojitsdcal and state law enforcement agencies rely for timely, accurate information. JITSD manages the IT systems, services, and interfaces to support nearly 800 DOJ employees, 325 statewide county motor vehicle system users, and over 3,000 Criminal Justice Information Network (CJIN) users across the state.

Enter Division
ago-lsd

Division of Criminal Investigation

The Division of Criminal Investigation (DCI) at the Montana Department of Justice is involved in many aspects of Montana law enforcement and is integral to the Department dciof Justice’s mission of promoting public safety.

Enter Division
ago-lsd

Montana Highway Patrol

Montana is rich in natural beauty and history. From Glacier Park in the west to Makoshika Park in the east, the men and women of the Montana Highway Patrol are working hard to make your travels safe and enjoyable. The Highway Patrol’s core values are “Service, Integrity and Respect.” These values are reflected in our commitment to public safety through diligent and fair enforcement of our traffic codes.

Enter Division
ago-lsd

Montana Law Enforcement Academy

The Montana Law Enforcement Academy is the premier law enforcement and public safety educational and training institution for state, county, city and tribal officers throughout the state. The Academy offers entry-level programs referred to as Basic Programs and advanced training through an array of Professional Development Programs.

Enter Division
ago-lsd

Public Safety Officer Standards & Training

The Council was formed in 2007 under 2-15-2029, MCA as an independent Quasi-judicial board. And as allowed by statute the Council adopted Administrative Rules in order to implement the provisions of Title 44, chapter 4, part 4, MCA. Per 44-4-403, MCA the Council is required to set employment and training standards for all Public Safety Officers as defined in 44-4-401, MCA and in addition the Council shall provide for the certification or recertification of public safety officers and for the suspension or revocation of certification of public safety officers.

Enter Division
ago-lsd

Gambling Control Division

Through the Gambling Control Division, the Department of Justice regulates all forms of gambling in Montana, except for the Montana Lottery and horse racing. The legislature has charged the division with maintaining a uniform regulatory climate that is fair and free of corrupt influences. The division is also responsible for collecting gambling revenue for state and local governments.

Enter Division
ago-lsd

Motor Vehicle Division

The mission of the Motor Vehicle Division (MVD) is to identify and promote efficient, cost-effective programs that benefit the interests, safety, and well-being of Montana citizens through licensing, registering, and regulating the motoring activities of the public. The MVD continuously strives for excellence in customer service. Streamlining the way we do business has allowed us to improve our efficiency and make our services more convenient for our customers.

Enter Division
ago-lsd

Natural Resource Damage Program

The Natural Resource Damage Program (NRDP) was created in 1990 to prepare the state’s lawsuit against the Atlantic Richfield Co. (ARCO) for injuries to the natural resources in the Upper Clark Fork River Basin (UCFRB). Decades of mining and mineral processing operations in and around Butte and Anaconda released substantial quantities of hazardous substances into the Upper Clark Fork River Basin between Butte and Milltown. These hazardous substances extensively degraded the area’s natural resources.

Enter Division
ago-lsd

Office of Consumer Protection

Enforce consumer laws designed to protect the consumer from unfair or deceptive business practices. Enforce statutes relating to telephone solicitation and telemarketing. Provide information to consumers about their basic rights under consumer laws. Assist consumers by distributing consumer education materials including scam and consumer alerts. Investigate false, misleading, or deceptive trade practices.

Enter Division
ago-lsd

Human Trafficking

The Montana Department of Justice has a continued commitment to victims of human trafficking. In partnership with federal authorities, our agency plays a key role in the investigation, enforcement, and prosecution of crimes related to human trafficking in Montana. This form of modern day slavery does happen here in Big Sky Country.

Enter
ago-lsd

Prescription Drug Abuse Awareness Program

Montana’s deadliest drugs aren’t made in secret labs and they don’t always come from dealers on the corner. They’re in our own medicine cabinets. Each year, prescription drug abuse contributes to the deaths of more than 300 Montanans — making prescription drug abuse 15 times more deadly than meth, heroin and cocaine combined. Our kids report the third-highest rate of prescription drug abuse in the country and more than half of them say prescription drugs are easier to get than street drugs.

Enter
ago-lsd

Safe in Your Space

When it comes to embracing new technology, kids have rapidly outpaced their parents and teachers. By their early school years, many children are already more comfortable on the Internet than their parents. But just because children are smart enough to know how to navigate the Internet, doesn’t mean they have the experience to make good decisions about some of the possibilities they may face online.

Enter
ago-lsd

Montana Sexual or Violent Offender Registry

Created by the Montana Department of Justice in 1989, the Sexual or Violent Offender Registry is a valuable resource for Montanans to protect their families against sexual or violent offenders.

Enter
ago-lsd

Montana 24/7 Sobriety Program

Drinking and driving has been a chronic – and deadly — problem on Montana’s roadways for decades. In 2008, Montana was ranked as the deadliest state in the nation when it came to per capita DUI-related traffic fatalities.

Enter
ago-lsd

Work for Justice

Everyday at The Montana Department of Justice, our employees are dedicated to ensuring the well-being and rights of the people of our great state. We’re passionate about what we do because it’s more than a job or a career. It’s about who we are as people. If this sounds like you, your unique experiences, knowledge, and values may be just what the Montana Department of Justice is looking for and needs. In return we can offer a culture that promotes fairness and growth opportunities.

Enter