Pacificare Health Systems

Cypress-based PacifiCare Health Systems, a division of UnitedHealth Group Inc., has announced that it will lay off 482 employees in Orange County by September. The cutbacks, most of them in customer service, come after the elimination of 59 jobs earlier this year. UnitedHealth, the country's second-largest health insurer, bought PacifiCare in December. The Minnetonka, Minn., company has 7,000 employees in California.

The Schwarzenegger administration is moving to fire a top HMO regulator who held stock in UnitedHealth Group Inc. when he helped review the 2005 acquisition of PacifiCare Health Systems Inc. The $9.2-billion-dollar deal was approved in December after four months of consideration by state officials. The regulator is Kevin Donohue, an attorney and deputy director of the California Department of Managed Health Care. He is on paid administrative leave pending a civil service disciplinary hearing.

A former deputy director for the California Department of Managed Health Care has agreed to pay a $3,000 administrative fine after admitting a conflict of interest violation, the state's ethics watchdog agency said Monday. Kevin Donohue, who still works for the agency in another capacity, admitted he held stock in UnitedHealth Group Inc. when he helped review the 2005 merger of the firm with PacifiCare Health Systems Inc., according to a stipulated settlement with the state Fair Political Practices Commission.

PacifiCare Health Systems Inc. gave a 2005 earnings forecast that was roughly in line with Wall Street analysts' views, citing growth in commercial membership in its health plans. The Cypress-based health insurer estimated 2005 net income of $360 million to $375 million and 15% growth in revenue. It expects earnings of $3.64 to $3.80 a share and forecast first-quarter profit of 85 cents to 89 cents a share. That compares with the average estimates of analysts polled by Reuters Estimates of $3.

PacifiCare Health Systems Inc. said Thursday that its fourth-quarter profit more than doubled on the strength of membership growth and on premium hikes that exceeded the increase in the cost of medical care. For the quarter ended Dec. 31, PacifiCare reported net income of $72 million, or 76 cents a share, matching analysts' expectations, compared with net income of $31.5 million, or 35 cents a share, for the same quarter a year earlier.

PacifiCare Health Systems Inc., the Cypress-based manager of Medicare healthcare plans, and other insurers may get an increase of at least 4% in overall payments from the program next year, the government said. The insurers were given an average reimbursement increase of at least 6.6% this year under a 2003 law to revamp Medicare, the U.S. government's health-insurance program for the elderly and disabled, at a cost of more than $500 billion.

PacifiCare Health Systems Inc., the biggest manager of Medicare health plans, and other insurers will get about a 4.8% payment increase from the program in 2006, the Centers for Medicare and Medicaid Services said Monday. Managed-care plans that enroll some of the 41 million people in Medicare, the U.S. government's health insurance program for the elderly and disabled, will get the increased payments, the Baltimore-based agency said.

PacifiCare Health Systems Inc. has proposed five insurance plans, including one with no monthly premium, in a bid to provide drug coverage to Medicare patients nationwide next year, Chief Executive Howard G. Phanstiel said Friday. Medicare, the U.S. health insurance program for 42 million elderly and disabled people, will begin paying for a broad array of prescription drugs in 2006 through plans administered by private insurers.

Insurance juggernaut UnitedHealth Group said Wednesday that it would buy Orange County-based PacifiCare Health Systems in an $8.1-billion deal that would give it a big stake in California and would accelerate consolidation of the health insurance business. UnitedHealth, the nation's second-largest health insurer with 22 million members, would gain ground on industry leader WellPoint Inc.

The acquisition of PacifiCare Health Systems Inc. by industry giant UnitedHealth Group Inc. would mean more competition in the health insurance business -- not less, the companies' chief executives said Friday. UnitedHealth's William W. McGuire and PacifiCare's Howard Phanstiel described the $8.1-billion deal -- which must win regulatory and shareholder approval -- as a step toward a more rational healthcare system.