Business
Pa. Blues make merger case
NEWS IN BRIEF — Posted May 21, 2007
Highmark Inc. and Independence Blue Cross say their proposed merger should go through because their deal will have no effect on health competition in Pennsylvania.
That contention was made in a 3,000-page filing that the Pennsylvania Insurance Dept. has posted online (link). Receipt of the filing allows interested parties to comment on it to the department, which must approve the deal.
The filing includes detailed organizational charts, financial information and other evidence that the companies believe show that a merger between Pittsburgh-based Highmark, which operates mostly in western Pennsylvania, and Philadelphia-based Independence, which operates mostly in the eastern part of the state, is one of two companies whose territories have little overlap, though they do compete for Medicaid managed care business in the central part of the state.
Highmark and Independence, both nonprofit companies, are two of the state's four BlueCross BlueShield-licensed health plans.
"The two nonprofit corporations offer products in different geographic markets and do not compete with each other," the companies said in their filings. "Therefore, the combination of the two nonprofit corporations will not substantially lessen competition or tend to create a monopoly."
The combined company would insure 7.1 million out of 12.4 million Pennsylvanians, and its $20 billion in annual revenue would make it the sixth-largest health plan in the nation. The Pennsylvania Medical Society is among those who have called on regulators to review the merger thoroughly and have expressed worries about the impact of a new, larger plan.
Note: This item originally appeared at http://www.ama-assn.org/amednews/2007/05/21/bibf0521.htm.
