November 19th, 2008

Today the Philadelphia Inquirer editorializes on the proposed Blues merger, on which Insurance Commissioner Joel Ario will soon make a decision.  The Inquirer says that the Senate Banking & Insurance Committee should recommend Ario to disapprove the merger, because it provides little to no benefit for consumers.  Plus, a “no” recommendation from that committee would make it more difficult for Ario to approve the merger.

Writes the Inquirer:

“It isn’t easy to stand up to the politically powerful Blues – Blue Cross of Philadelphia and Highmark Inc. of Pittsburgh. But it’s the right move for consumers, who would benefit too little from the deal as it is currently structured.

…

Senate Banking and Insurance Committee chairman Donald J. White (R., Indiana) is an insurance broker, and has voiced skepticism that the merger will provide any long-term benefits for consumers.

Anyone should be able to see that consolidating the state’s two giant health insurers into a virtual monopoly would weaken competition. Just look at basic economics.

Combining Independence Blue Cross, which dominates the Philadelphia region, with Highmark, which dominates the Pittsburgh region, would create a behemoth whose claws grip nearly 70 percent of the state’s health-insurance market.”

Visit the Inquirer to read the rest of their strong case against the merger.