Wednesday, January 21, 2009
Pennsylvania insurance providers Highmark and Independence Blue Cross say they are withdrawing their merger applications with the Pennsylvania Insurance Department. The heads of the two companies say they feel the merger is still very advantageous but believe the state will not approve the deal as they had hoped. The merger was proposed more than a year and a half ago and the state has held 10 public hearings including one in Pittsburgh in July. The CEO's of both insurance providers say they felt the state would reject the merger on the grounds that it would hurt competition. In a statement they say, "We fundamentally disagree" and "This is genuinely disappointing." Highmark's client base is strongest in the Pittsburgh market and IBS is focused mostly in the Philadelphia area however, the two companies do overlap in the center of the state. A decision from the Insurance Department was expected Jan. 28th. That decision was expected to allow the merger but with the stipulation that the merged company not use the "Blue Cross" brand. In the statement IBS says it has worked for "more than 70 years developing our brands' value..." and "Throughout the process, we have stated repeatedly that we would not give up one of our brands."