Kenneth Melani, MD, president and CEO of Pittsburgh-based Highmark, and Joseph Frick, president and CEO of Independence Blue Cross in Philadelphia, jointly blamed the state for the failed merger in a statement.
The two executives said that despite outside expert analysis, 10 public hearings and extensive public comment documenting the advantages of the consolidation, the insurance department was opposing the merger “because of its belief that there would be an adverse impact on competition. We fundamentally disagree: We have shown that the combination would not lessen competition in our markets.”
Highmark covers 4.6 million lives in western and central Pennsylvania, while Independence insures 3.4 million in eastern Pennsylvania.
The merger had been opposed by state medical and hospital associations.
Pennsylvania Insurance Commissioner Joseph Ario said, in a news release, he welcomed the withdrawal and confirmed he planned to disapprove the merger. “Bigger is not always better — and in this case, bigger would have been bad for consumers,” said Mr. Ario.
Mr. Ario said, if approved, the merged insurers could have controlled a significant portion of the state’s health insurance market, with $17 billion in annual premium revenues and a 51 percent market share.
To read the news release from Highmark and Independence Blue Cross.
Read the news release from the Pennsylvania Insurance Department.
