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Blue Cross Merger Plan Gets OK from Examiner
Lindeen and Fox must decide whether to approve merger
HELENA – A former state Supreme Court justice acting as a hearing examiner has recommended for approval the proposed merger of Blue Cross and Blue Shield of Montana with Health Care Service Corp. of Chicago.

Lee Newspapers of Montana reports that William Leaphart on Thursday recommended in a 53-page report that Attorney General Tim Fox and Insurance Commissioner Monica Lindeen approve the plan.

Lindeen and Fox have 60 days to decide whether to approve the merger of Blue Cross and Blue Shield with the nation's fourth-largest health insurer. Both need to approve the plan for it to move forward.

Health Care Service Corp. is offering $40.2 million. Leaphart wrote that amount met state laws by preserving and protecting "the fair market value of the purchased assets," and that the proposed deal was "in the public interest."

He also noted that the hearing record contained nothing indicating the merger would violate federal or state antitrust laws.

Blue Cross is Montana's largest private health insurer with about 250,000 customers. Health Care Service Corp. has about 13.2 million customers in Illinois, Texas, New Mexico and Oklahoma.

Health Care Service Corp originally agreed to pay $17.6 million when it announced last year that it would buy Montana's largest health insurer. In March the Chicago health insurer agreed to pay an additional $23 million.

The company has also agreed as part of the deal to retain all current Blue Cross employees at their current pay or higher, and to create at least 100 new jobs in Montana by the end of 2016.

As a nonprofit insurer, Blue Cross didn't have to pay premium taxes. But Health Care Service Corp. will have to pay premium taxes in Montana, about $12 million a year.

In addition, Health Care Service Corp. has agreed to match Blue Cross' charitable giving for three years. It will also donate $3 million more to foundations that support dental care for children and foundations that fight childhood obesity.
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