Members of the state Senate Banking and Insurance Committee are scheduled to vote Thursday on whether to support the proposed merger of Highmark Inc. and Independence Blue Cross.
The merger, announced in March 2007, would create the state's dominant health insurer, controlling between 53 percent and 72 percent of the market in the state, depending on which consultant's findings are used.
The Senate panel's non-binding recommendations will be forwarded to state Insurance Commissioner Joel Ario, who by law will render a final decision on the merger no earlier than mid-January. Legislation passed in July gave Ario the final say, but provided that state Senate and House insurance committees review the merger and make recommendations.
Proponents say a merger will give the new insurer the size and strength to compete against the largest for-profit insurers, while opponents say the anemic competition statewide will only erode following a combination.
Senators on the 14-member committee have been close-mouthed concerning Thursday's vote. Two members, Chairman Don White, R-Indiana, and minority member Robert J. Mellow, D-Lackawanna, were the only members to testify at public hearings this summer.
White, an insurance broker, said at a hearing that neither Highmark nor Independence Blue Cross had clearly demonstrated a merger's benefits.
"Personally, I am extremely skeptical that any true long-term benefits will be derived from this merger," White said in testimony.
Mellow's testimony indicated he's a deal proponent. "The merger of these two efficient and well-run companies with decades of service to all, regardless of pre-existing conditions or economic position, will result in lower costs, better service and greater access to health care for millions of Pennsylvanians," Mellow said.
Committee member Sen. John Pippy, R-Moon, said Tuesday that determining which way to vote is "challenging." "If you're from the western part of the state, you have to look at the merger not only from a public policy standpoint, but also from a jobs standpoint, since Highmark is such a large employer in this area," Pippy said.
In a statement yesterday, Highmark spokesman Michael Weinstein said, "The Insurance Department is charged with considering the proposed combination in light of seven standards set forth in Pennsylvania's Insurance Holding Companies Act. The act provides that the department approve a transaction unless it specifically finds that one of the seven conditions exists. We believe that none of these conditions exist."
Highmark and Independence Blue Cross say $1 billion in operating efficiencies expected over six years by merging would allow the stabilization of subscriber prices and expansion of coverage for the uninsured.
No comments:
Post a Comment