PA health plan merger would create giant

A proposed merger between two of Pennsylvania's nonprofit health insurers would create the nation's third largest health insurer, at least when measured by premiums collected. The boards of Independence Blue Cross of Philadelphia and Highmark have already agreed on the merger, which would combine Independence's base of 3.4 million members with Highmark's 5.6 million insureds. The two companies said that when they merge, they'll be able to save customers a combined $580 million through administrative efficiencies, while contributing $650 million to help the state's uninsured get coverage. They'll certainly have the financial muscle to get the job done, as they'll have a whopping combined annual income of more than $20 billion. Like health plan consolidations in other states--such as the planned acquisition of Sierra Health Services by UnitedHealth Group--the proposed deal has raised flags for providers, who worry that the as-yet-unnamed merged entity could wield unfair negotiating power. The deal isn't a fait accompli yet, however, as the plans will need both state and federal approval to proceed.

To find out more about the deal:
- read this AP article
- read this Philadelphia Business Journal piece

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