University HealthSeveral potential bidders have submitted plans to acquire ailing health insurer University Health Alliance, state Insurance Commissioner Wayne Metcalf said yesterday.
Alliance attracts 4 bids
The Hawaii insurer is $2.5 million
short of the minimum level of
reserves required by the state
By Lyn Danninger
"We have four entities that have expressed interest in acquiring UHA," Metcalf said.
Metcalf had given interested parties until the close of business yesterday to file proposals with his office. He declined to disclose the names of the bidders.
The Insurance Division will look over the proposals during the next few weeks to determine likely candidates, he said.
"We are going to evaluate their responses and proceed from there to determine whether their proposed plans of operation can prove viable," he said.
With UHA now around $2.5 million short of the minimum level of financial reserves required by the state to do business, potential buyers will need the ability to cover that amount.
They would also likely have to come up with at least another $1 million to $1.5 million to cover unforeseen claims costs through the end of the year, say those familiar with the situation.
UHA's financial slide began towards the end of last year. During the last quarter of the year through the first quarter of 2001, the company picked up 14,000 new members when Queen's Health Plans decided to exit the insurance division.
That brought the plan's total membership to around 32,000.
The company then fell behind on its reserves and was forced to enter into a supervisory arrangement with the Insurance Division.
Since June, a court-appointed rehabilitator has been overseeing company operations.