State Explains Why it Did Not Like Highmark Merger

A day after Independence Blue Cross and Highmark pulled the plug on what would have been the largest health insurance merger in state history, Pennsylvania's top insurance official said he was prepared to reject the deal. Joel Ario says his department was reviewing the Highmark/Independence merger on seven different criteria. It passed five but failed on two important aspects--competition and impact on the insurance-buying public. Ario says if the two providers began operating as one company, insurance consumers would have had fewer choices. Ario says the health insurance market is already too limited, with car, home, life and other forms of insurance having dozens of providers in Pennsylvania, while only a small group of companies dominate the health insurance field. The merged company would have held 51 percent of the state's market share. The providers argued they did not go head to head in any market, but Governor Ed Rendell countered that with the merger, they never would. Ario says when it came down to it, bigger wasn't better for Commonwealth consumers.