PacifiCare To Acquire Pacific Life Health Operation

Pacific Life is selling the group health business because it wants to focus on its core life insurance, annuity and pension plan operations, according to Pacific Life Chairman Thomas Sutton.

PacifiCare Chairman Howard Phanstiel says his company is buying because of a strategy that calls for a tighter focus on the individual and small group markets.

Completing the Pacific Life deal and an earlier deal with a Midwestern insurer, American Medical Security Group Inc., Green Bay, Wis., should reduce PacifiCare's dependence on the Medicare managed care program and increase the percentage of PacifiCare members living outside California to about 50%, PacifiCare says.

PacifiCare also is emphasizing the benefits of acquiring a group health operation that has some overlap with its own.

Although the Pacific Life deal will help extend PacifiCare's geographic reach, "Pacific Life's significant additional overlap allows us to extend the benefits of our existing lower-cost networks to the membership acquired from them," Phanstiel says in a statement.