Last week's announcement that two more health insurance companies would merge has some shareholders singing and consumer advocates sighing.

PacifiCare Health Systems Inc. and UnitedHealth Group announced July 6 that the companies would merge in an $8.1 billion deal, which is subject to government approvals in 10 states including Nevada.

The companies say the merger creates more options for consumers -- including about 200,000 Nevadans who are insured by PacifiCare or UnitedHealth on commercial, individual or Medicare plans -- such as a larger provider network that spans the United States and more plan choices.

UnitedHealth would benefit from owning PacifiCare's Medicare Advantage plans offered in Nevada and seven other states. UnitedHealth would also have a new piece of Nevada's managed-care plans. (It sold its managed-care business to NevadaCare in 2003, the Nevada State Division of Insurance said.) PacifiCare would benefit from UnitedHealth's $2 billion technology investment.

Local insurance competitors say the deal would create opportunities for them.

"We certainly realize that once the agreement is completed there will be competition," Sierra Health spokeswoman Jenny DesVaux Oakes said. "We've competed against large insurers before. We welcome competition and we think it's healthy. We're going to continue to focus on our core market here in Nevada."

NevadaCare and its sister company Summerlin Life & Health Insurance Co. in the coming weeks will look at secondary niches they could develop within the state, said Larry Hurst, director of government affairs of the two companies.

"Competition is good for people," Hurst said. "It creates competitiveness (and) prices that get driven down a little bit. The more membership you have the better the deals you can get with hospitals, physician groups."

He said he is waiting to see how Nevadans would be affected by the merger and what state regulators will say. When Anthem Inc. and WellPoint Health Networks Inc. merged last November -- forming WellPoint Inc. -- Nevada had no say in the deal because neither company was based here.

California did have a say in that deal and demanded about $265 million to provide coverage to more children, nurse training and health care clinics in underserved communities before granting approval of the merger. (Georgia also received millions of dollars to assist underserved areas in order to approve the deal.)

Nevada received no compensation from that merger and it's uncertain whether it would receive money to help the state's uninsured and poor people if this merger is approved.

"Is Nevada going to get any windfall or assistance for safety net program and uninsured like California did?" Hurst asked. "Why didn't they get some help last time?"

California Insurance Commissioner John Garamendi had strong concerns about the merger of Anthem and WellPoint year and has said he would carefully review the PacifiCare and UnitedHealth merger to ensure consumers were protected.

Nevada Insurance Commissioner Alice Molasky-Arman's office is reviewing PacifiCare and UnitedHealth's application and a public hearing will be held within 90 days, which is when she must respond to the application.

Although Nevada regulators had no say in the Anthem merger, insurance brokers had plenty to say and they have similar concerns with the UnitedHealth merger.

Bob Bishop, president of KIA Insurance in Las Vegas, said consumers potentially could lose three insurance carriers from the merger. PacifiCare purchased American Medical Security Group and Pacific Life, both of which offer group policies.

"Because we've already lost those two the consumer stands to lose another carrier with UnitedHealth taking over PacifiCare," Bishop said.

In 2006, PacifiCare has said all of the people insured by Pacific Life and American Medical Security will become PacifiCare policyholders.

Bishop said his main concerns are for small group policyholders -- people who work for companies of between 2 and 50 people -- and individual policyholders.

"They say bigger is better because we're going to offer more providers, more competitive prices," he said. "We have already seen what has happened with the WellPoint merger with Anthem that bigger is not better because the individuals already have seen a rate increase here and California."

He said WellPoint individual plan members have seen premium increases that range from 12 percent to 20 percent since January.

PacifiCare spokesman Tyler Mason insists his company's merger would be different because PacifiCare and UnitedHealth cater to different markets in Nevada.

"The two companies are different in that they complement each other; especially in Las Vegas the membership portfolio is different," Mason said. "It's unlike a Sierra and PacifiCare getting together. We're doing this deal because it is a good fit."

He said PacifiCare's members would have fewer out-of-network costs because UnitedHealth has a larger network of doctors and hospitals to choose from and PacifiCare will have affinity agreements with those providers.

For seniors insured by both companies, the deal means potentially lower prescription drug costs because PacifiCare owns a mail-order pharmacy and the combined companies have larger buying power.

While premiums are based on medical costs, they are likely to be mitigated by the merger.

"Brokers will find better competition with enhanced portfolios, better cost alternatives," Mason said.

Michelle Swafford covers health care and small business for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached by e-mail at swafford@lasvegassun.com or at (702) 259-2326.