With approval from regulators in Connecticut, New Jersey and New York, UnitedHealthcare has completed its acquisition of Health Net’s northeast business for what could amount to $630 million.

Minneapolis, Minn.-based UnitedHealthcare, a subsidiary of UnitedHealth Group, announced the acquisition of Health Net’s subsidiaries that serve 578,000 in the three states as well as the rights to renew membership.

When announced in July, UnitedHealthcare said upon regulatory approval, it would transfer $290 million to California-based Health Net, with another $160 million transferred over the following two years as the business transitions, according to the companies.

UnitedHealthcare is also expected to pay Health Net $60 million for its Medicare business and an additional consideration on a per member basis as Health Net members shift to UnitedHealthcare, which could bring $120 million if all members make the move, the companies announced months ago.

‘Best option for our customers’

The announcement of full regulatory approval by both companies contained no financial information regarding the acquisition.

Jeff Alter, UnitedHealthcare’s chief executive officer for the northeast region, said the company has a “long, successful history” of providing the Northeast with affordable health care, something it looks to continue with Health Net customers.

“With UnitedHealthcare, Health Net’s members in the Northeast will gain access to one of the largest local and national care provider networks, robust clinical programs, proactive care management and wellness tools, and technology that simplifies and enhances the health care experience,” Alter said in a statement.

Paul Lambdin

Paul Lambdin, president of Health Net of the Northeast, said the company believes UnitedHealthcare “is the best option for our customers in the Northeast.

“We look forward to working with UnitedHealthcare on a seamless renewal process that we believe our customers will appreciate,” he said. “We will continue to maintain the high quality of service our customers have come to expect from us.”

While Connecticut Insurance Commissioner Thomas R. Sullivan approved the deal, the state’s attorney general, Richard Blumenthal, said he will investigate the acquisition to ensure there are not anti-competitive consequences that would violate state law.

Blumenthal’s office did not give a timeline for its inquiry.

Status quo for now

UnitedHealthcare will enroll Health Net’s commercial customers in the Northeast in a comparable Oxford or UnitedHealthcare plan as they reach renewal dates and, in the meantime, their current benefits remain in effect.

UnitedHealthcare also announced that there will be no changes in the 2010 plans of Health Net’s Medicare Advantage members in Connecticut and its Prescription Drug Plan members in New York. UnitedHealthcare said it expects to file 2011 Medicare plan benefits with the Centers for Medicare and Medicaid Services during 2010 that will be made public after receiving CMS approval, beginning October 1, 2010.

Subject to approval by CMS, UnitedHealthcare will begin operating these Medicare plans on January 1, 2011.

UnitedHealthcare has also requested approval from the New Jersey Department of Human Services to transition Health Net’s New Jersey Medicaid business.

Upon receiving approval, Medicaid members currently enrolled in Health Net of New Jersey’s Healthy Options plan will be shifted to UnitedHealthcare’s AmeriChoice plan, the insurer said, unless they choose another participating health care plan.

For Health Net’s Medicaid members in New Jersey, there are no expected changes until the middle of 2010.