Pa. Seeks Public Input on Possible Merger of 2 Biggest Health Plans

March 29, 2007

Acting Pennsylvania Insurance Commissioner Randy Rohrbaugh reacted to the announcement from the boards of Highmark Blue Shield and Independence Blue Cross of their intent to combine their operations, promising to keep consumers in mind while conducting a public review of the proposed transaction.

At the same time, he noted that current state law limits the scope of the department’s authority to review transactions of this type for the Blue plans.

“Our highest priority is to see that consumers would be protected in this type of transaction,” Rohrbaugh said. “As soon as any filings are presented to us, the public portion of those filings will be made publicly available — but we have not received any filings related to this transaction as of yet.

He said the department would “most likely” hold hearings in different regions of the commonwealth to obtain public input.

In a typical insurance company transaction, the department would look at specific standards related to solvency, business plans and management, as well as the impact the transaction would have on competition and the consumer. Under current law, Pennsylvania’s Blue Plans and fraternal benefit societies are exempted from those standards of review at the holding company level.

“That is why Governor Rendell strongly supports the passage of House Bill 112 and Senate Bill 550 — measures that will ensure the appropriate level of oversight in transactions such as this,” Rohrbaugh said. “Adding the Blue Plans to the Insurance Holding Companies Act, will enhance our examination of these types of transactions and strengthen our ability to protect health insurance consumers.”

Source: Pennsylvania Insurance Department

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