Consumers, legislators challenge PA Blues merger

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, 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 from The Philadelphia Inquirer

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