Feds See No Antitrust Reason to Block Pa. Health Insurers’ Merger

June 1, 2007

Federal antitrust regulators this week approved a merger between Pennsylvania’s two largest health insurers.

The Federal Trade Commission gave the green light to the marriage between Highmark Inc. of Pittsburgh and Independence Blue Cross, based in Philadelphia.

The merger had created antitrust concerns among Pennsylvania doctors, hospitals and lawmakers, because combined they would become the largest health insurer in the state with over 53 percent of the market.

Sen. Arlen Specter, R-Pa., held a hearing in Philadelphia on the merger last month, while the state Senate passed a bill that would give the Pennsylvania Department of Insurance authority over mergers between holding companies of nonprofit insurers, retroactive to Jan. 1.

When the two insurers announced their merger in March, they said the combined company will result in more than $1 billion in savings and revenue growth over six years, as they become more efficient and make joint technology and administrative investments.

Independence currently serves 3.4 million members, mainly in the Philadelphia area, and employs 9,500. Highmark has 4.6 million members, mostly in the western part of the state, and employs 18,500, more than half of them in Pennsylvania.

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