Officials with the Kaiser Foundation Health Plan have filed documents required to acquire Seattle’s Group Health Cooperative. The move launches a review by the state insurance commissioner, but voting members must approve the deal for it to go forward.
Officials with California’s Kaiser Foundation Health Plan have formally applied to acquire Seattle’s Group Health Cooperative, the next step in the controversial proposal, Washington state Insurance Commissioner Mike Kreidler said Wednesday.
The application launches a review of the proposed deal, which would make the Northwest co-op part of Kaiser Permanente’s 10.1 million members in eight states and Washington, D.C.
The documents include a public summary of the proposal, but the full application will remain confidential until Kreidler’s review is complete.
“The commissioner will consider the proposal’s effect on the overall stability of the health insurance market in Washington state, including competition and consumer choice,” Kreidler said in a statement.
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The deal, announced in December, hinges on a decision by about 27,000 registered voting members, who have until March 9 to submit ballots for or against the deal. Two-thirds of the voting members must approve the plan for it to go forward. If it’s turned down, Kreidler’s review would stop. Votes are being tallied by an independent tabulator, with results expected to be announced March 12, a Group Health spokesman said.
Under the proposal, Kaiser officials said they would pay nearly $1.8 billion to establish a new nonprofit Group Health Community Foundation, and promised to spend an additional $1 billion in the next decade to expand facilities, staff, technology and research in Washington state.
Kaiser has annual revenues of nearly $60 billion; Group Health has $3.5 billion in annual income.
Proponents of the deal say the move is necessary in an era of growing hospital and health-system acquisitions to ensure the future of care for Group Health members.
Critics contend Group Health officials didn’t provide members of the co-op, founded in 1947, enough time or information to consider the plan, which essentially dissolves the institution based on the notion of shared governance.
One issue has been the timing of the announcement, which left most of Group Health’s 600,000 members ineligible to cast ballots. At a January meeting, where an advisory vote was taken, 1,094 registered members approved the plan, while 179 were opposed and 51 abstained.
Opponents also have questioned the purpose and governance of the new foundation, which has a goal “to extend Group Health’s purpose to all people in Washington,” according to online documents.
If Group Health members approve the plan, Kreidler’s review is expected to take at least six months — and likely longer. Once complete, the commissioner’s office would post all public documents and orders related to the proposed sale.
Regional public meetings about the plan will be held later this year, followed by a formal public hearing once the review is finished.