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For Immediate Release
March 28, 2007
Contact:
Joe Pittman
(717) 787-8724 or
(724) 541-0552
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  Senate
Approves Senator White's Merger Bill
Senate Bill 550 would ensure state oversight of health insurance deals
The Senate today approved Senate Bill 550, legislation
introduced by Senator Don White, Chairman of the Senate Banking and Insurance
Committee, which would give the Pennsylvania Department of Insurance oversight
power over mergers involving health care insurers such as Blue Cross and Blue
Shield.
"The proposed deal between Highmark Inc. (Highmark Blue Cross
and Blue Shield) and Independence Blue Cross (IBC) clearly demonstrates the need
for state oversight as a way to ensure a complete review of the ramifications of
mega-mergers between health care service corporations like Blue Cross and Blue
Shield," Senator White said.
"I am extremely pleased the Senate expeditiously approved this
important bill and I hope the House will act just as quickly," Senator White
said. "It is important to note the provisions of Senate Bill 550 apply to any
merger established on or after January 1, 2007, so passage of this legislation
ensures a Department of Insurance review of the proposed Highmark-IBC merger."
The Department of Insurance already has oversight power over
mergers involving for-profit companies. SB 550 would bring deals involving
health service plans under the same standards of the Holding Company Act.
Senator White said the long-term ramifications of a mega-merger
of the two largest health care insurers in Pennsylvania could impact the quality
and availability of health care coverage in the Commonwealth.
"The Commonwealth must support policies that encourage and
promote competitiveness in the health care insurance market." Senator White
said. "Giving the Department oversight power is an important step in ensuring
that mergers of these companies do not result in a virtual monopoly in the
industry."
Senator White said he's planning to study the Highmark-IBC
proposal and will likely call a public hearing.
"We are talking about the potential joining of the largest
health care insurance company in Western Pennsylvania with that of the largest
insurer in Southeastern Pennsylvania which raises a number of very serious
questions," Senator White said.
"Primarily, we have to be concerned this merger could create a
single, multi-billion dollar, mega-entity which would crush what little
competition remains in Pennsylvania's health care insurance market," Senator
White continued. "Right now, the last thing we need in the Commonwealth is
further limitation on the competitiveness in the health care insurance market.
There are real concerns that costs will skyrocket, quality of care will decrease
and the insured will be stuck with the bill.
"I believe the Banking and Insurance Committee should hold
public hearings to discuss this proposal, as well as the future of the health
care insurance market. As legislators, we need to be educated so we can better
inform the people of the Commonwealth about this proposed merger."
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