A proposed merger between Pennsylvania-based health plans Independence Blue Cross and Highmark drew criticism yesterday, with politicians and consumer groups raising questions about the impact of the deal. The proposed merger [1], which has already been approved by the boards of the two plans, would create the nation's third-largest health insurer, with 9 million beneficiaries and more than $20 billion in annual income. However, the deal can't take place without federal and state approval. Officials with the health plans are telling regulators that the deal will generate $1 billion in savings over the next six years, but at a hearing yesterday, Sen. Arlen Specter (R-PA) said he had "real concerns" about the financial impact of the planned merger. He also expressed skepticism about the giants' nonprofit status, noting that Independence had a 2005 surplus of $1.43 billion and Highmark a $2.8 billion surplus. Consumer advocates, meanwhile, contended that the deal would artificially inflate prices and discourage competition.

To learn more about the merger:
- read this piece [2] from The Philadelphia Inquirer

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