Montana Attorney General Tim Fox gave his conditional approval late Tuesday for a portion of Blue Cross and Blue Shield of Montana’s proposed merger with an Illinois health insurer.
Fox said the $40.2 million purchase price that Health Care Service Corp. proposed to pay for Blue Cross is a “fair market value” for the company, and that the money will go to a new nonprofit charity called the Montana Healthcare Foundation.
In an order, Fox said the two firms have to close the deal within 60 days and transfer the money to the foundation.
Fox’s order is only part of the approval needed for the proposed merger, focusing on the market value of the transaction.
State Auditor Monica Lindeen, who regulates insurance in Montana, also must decide whether the merger is in the public interest, regarding its effect on Montana consumers and health-insurance markets.
Lindeen has yet to issue her final order on the proposed merger, although she and Fox agreed in April to recommend approval of the merger if the companies agreed to several conditions – including the creation of 100 new jobs in the state.
HCSC, based in Chicago, is the country’s fourth largest private health insurer. It would join forces with Blue Cross, the largest private health insurer in Montana, with about 250,000 customers.
HCSC has more than 13 million customers in Illinois, Texas, Oklahoma and New Mexico.
Fox also said as Blue Cross sells other assets that won’t be transferred to HCSC, it must submit monthly reports to his office on the dissolution of the company and the transfer of that sale revenue to the new foundation.
Plans for the foundation will be revealed later this week, Fox said.