Highmark-Delaware Blues merger approved with long list of conditions

Blue Cross Blue Shield of Delaware (BCBSD) has received permission to become an affiliate of Pittsburgh-based Highmark as long as both insurers meet a long list of 49 conditions.  

Delaware Insurance Commissioner Karen Weldin Stewart granted approval of the merger deal after imposing conditions that will protect BCBSD. "I have watched with great concern as Blue Cross Blue Shield of Delaware and other small health insurers have struggled to compete with large national insurers who have billions of dollars of capital and resources," Stewart said. "These small companies have limited ability to make the changes required by today's health care reform."

Key to Stewart's approval is keeping BCBSD a separate, Delaware-based company. Among the conditions she required include keeping BCBSD's headquarters in Delaware and holding BCBSD's employment steady. Stewart's conditions also direct Highmark to contribute $500,000 annually for 10 years to health area work force development programs and an additional $500,000 for 10 years to Delaware charities, reports LifeHealthPro.

With the merger, BCBSD can reduce administrative overhead and tap into Highmark's more modern processing systems, including claims-processing software and risk-management programs, for which BCBSD will pay annual fees to Highmark. The insurers must devise a formula to determine BCBSD's annual fee and then submit that formula to Stewart's office for approval, according to the Delaware News Journal.

Highmark will benefit from the affiliation by extending its brand geographically and gaining hundreds of thousands of new policyholders, the Pittsburgh Post-Gazette reports.

To learn more:
- view Stewart's approval statement
- read the Delaware News Journal article
- see the Pittsburgh Post-Gazette article
- check out the LifeHealthPro article

Related Articles:
Blue Cross-Highmark merger moving forward; Why Cigna won HealthSpring deal;
Blue Cross-Highmark deal bolstered under new state law
Hopeful Blue Cross must create foundation before Highmark merger
Highmark's affiliation with BlueCross scrutinized

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