Insurer UnitedHealth Group won U.S. antitrust approval on Monday to buy Sierra Health Services, despite criticism of the deal.
The Justice Department approved the $2.4 billion deal on the condition UnitedHealth, the largest U.S. health insurer, sell most of its Medicare Advantage business in Las Vegas, the government said in a statement.
The Nevada-based Sierra provides health insurance to about 310,000 people in the state, virtually all in the Las Vegas area.
Sierra also offers Medicare plans to about 260,000 members, including 60,000 in a full-service Medicare Advantage plan in Nevada and 200,000 in Medicare plans offering prescription drug coverage in about 30 states.
The Justice Department said the proposed deal -- as initially envisioned -- would have substantially lessened competition in the sale of Medicare Advantage plans in and around Las Vegas.
United provides health insurance to about 27,800 Medicare Advantage enrollees in the Las Vegas area and Sierra serves 49,500.
"Under the proposed settlement, United must promptly divest most of its assets relating to its Medicare Advantage business in the Las Vegas area. The Department has tentatively approved Humana as the acquirer, and United must first attempt to sell the assets to Humana before selling to another purchaser," the department said in a statement.
Nevada also settled with United over the proposed acquisition, the Justice Department said.
The Minnesota-based UnitedHealth had revenues of $75.4 billion in 2007, while Sierra reported revenues of $1.9 billion. The American Medical Association was among those who asked the Justice Department to block the proposed acquisition.
In a letter to then-U.S. Attorney General Alberto Gonzales, the AMA estimated the merger meant that United would control 78 percent of the HMO market in Nevada and 95 percent in the Las Vegas-Paradise metropolitan area.
Sierra shareholders voted overwhelmingly in June to approve the merger.