Case of the blues: Insurance merger threatens trouble for consumers
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The proposed merger of Pittsburgh-based Highmark and Philadelphia's Independence Blue Cross will keep the insurers robust and healthy, but it may not be as good for the rest of us.
Hundreds of people attended recent public hearings in Pittsburgh, Harrisburg and Philadelphia -- the last was on Wednesday -- where dozens of executives, economists, physicians and citizens addressed state Insurance Commissioner Joel Ario, who will have the final word on the subject.
If approved, the combined insurer would hold more than half of the state's market and become the third-largest health insurer in the nation, which the American Medical Association says amounts to a monopoly.
Highmark CEO Ken Melani and Independence's counterpart Joseph Frick contend the merger will allow the combined company to grow and compete against multistate insurers, and they say it won't hurt competition in the state because the two companies don't currently go head to head for business. Many of the speakers agreed with them, and the planned merger got a boost on Thursday when the U.S. Justice Department cleared it under federal antitrust law.
But how will the merger help patients whose premiums keep rising? Will it become more difficult for employers to negotiate better coverage for their workers? The insurers made no promises of rate reductions, improved availability of coverage or other obvious benefits for Pennsylvanians. And an estimated 1,200 stand to lose their jobs if the merger is approved.
Mr. Ario hopes to issue a decision by year's end, and he will continue to accept public input through the end of August. Anyone worried, as we are, about the health of the consumer in this deal should weigh in before it's too late. Comments including the writer's name, address and phone number can be submitted by e-mail to firstname.lastname@example.org. Detailed instructions are on the state Insurance Department Web site at www.ins.state.pa.us.
First Published July 21, 2008 12:00 am