And then there were three: Pennsylvania will have one fewer Blue Cross company if Highmark's latest deal is approved by state regulators.
Highmark, Pennsylvania's largest insurer and one of the largest Blue Cross licensees in the country, has reached a definitive merger agreement with Blue Cross of Northeastern Pennsylvania, a not-for-profit with more than half a million members in the 13 county region of greater Scranton.
Under the deal, Blue Cross of Northeastern PA will merge operations with Highmark, Highmark will become the Blue affiliate in the 13 county service area, and the two companies will fund a regional wellness and economic development charity with up to $100 million
"The merger will allow us to create greater efficiencies and offer new products and services to meet the changing healthcare needs of our members, customers, providers and the people of northeastern and northcentral Pennsylvania," said Blue Cross of Northeastern Pennsylvania president and CEO Denise Cesare, a 25-year veteran of the company, in a media release.
With healthcare "changing at an incredible pace," added William Winkenwerder, MD, president and CEO of Highmark Health, the merger will "enable BCNEPA to continue to improve the quality, accessibility and affordability of healthcare across its region while taking advantage of Highmark's resources, tools and advanced technologies."
Highmark said it will try to maintain local staffing levels and create a local advisory board to comment on major decisions related to the transition over the next four years. (Highmark itself is in the midst of some workforce restructuring, though, with 160 staffers in finance, sales and IT recently laid off at western Pennsylvania offices.)
In the first step for the merger's approval, Highmark has submitted a "Form A filing" to the Pennsylvania Insurance Department, which could bring a fair amount of scrutiny -- or even reject it.
In 2009, the state insurance commissioner blocked a proposed merger between Highmark and Independence Blue Cross, which insures Pennsylvanians in greater Philadelphia.
"The highest priority in our review of this application," said Pennsylvania Insurance Commissioner Michael Consedine in a media release, "is to see that consumers will be protected and the impacted health insurers remain financially strong and the market competitive."
If the deal is okayed, Highmark's health plans would cover about 4.8 million Pennsylvanians living in 62 of the state's 67 counties (plus about 300,000 members in Delaware and 300,000 in West Virginia).
It would also leave Pennsylvania with three Blue Cross licensees: Independence, with 2.2 million members, and Capital Blue Cross, with about 1 million members in the 21 county area of central Pennsylvania.