January 22nd, 2009

As we posted yesterday, Highmark and IBC withdrew their request to merge, and Insurance Commissioner Joel Ario said afterward that he would’ve denied their request anyway.  

But that is not the end of the story!  Newspapers across the state reported, and are still reporting on the development, and this morning Ario held a press conference detailing his would-be decision.

First, some biggie newspaper articles to check out: Philadelphia Inquirer (both an article and an editorial); Patriot-News; Pittsburgh Post-Gazette; and the Philadelphia Business Journal are just a few of many…

Second, some highlights from Ario’s press conference this morning.  (You can view the press kit from the conference, which includes many helpful charts and info packets, at the PID’s website).

- Highmark and IBC are both quality companies.

_ HOWEVER, in this case, bigger would not be better: Highmark and IBC are already the two largst health insurers in PA, and if allowed to consolidate, would have become the sixth largest health insurer in the nation.  This scale would have been concentrated in a single state:  The five largest insurers are spread out.  The resulting company would have had a more dominant position in PA than any other companies enjoy in any other state.

- The resulting company would have decreased consumer choice and access to healthcare.

- The resulting company would have had too much leverage over healthcare providers.

- We have a private health insurance system.  Private systems depend on competition.  Competition in healthcare is already low in PA.  To have even less competition would be of further detriment to the system.

- The merger could have worked only with appropriate conditions, which the Blues vehemently opposed.  One of these conditions was allowing the resulting company to keep only one of the Blues trademarks.   For more competitors to enter the PA market, one of the trademarks should be open for them to take up.