Senator White Hails House Passage of Merger Bill

House Bill 112 mirrors language of Senate Bill 550

Senator Don White, Chairman of the Senate Banking and Insurance Committee, hailed today's passage of legislation by the House of Representatives giving the Pennsylvania Department of Insurance oversight power over mergers involving health care insurers such as Blue Cross and Blue Shield.

House Bill 112, which for the most part mirrors the language Senator White included in his Senate Bill 550, is headed to the Senate for consideration. The Senate previously passed SB 550 on March 28.

"We need to expeditiously continue the legislative process and send a measure to the Governor, regardless of whether it is in the form of a House Bill or a Senate Bill," Senator White said. "I applaud the House for taking action and look forward to reviewing House Bill 112."

The bills were sparked by the proposed merger between Highmark Inc. (Highmark Blue Cross and Blue Shield) and Independence Blue Cross (IBC) announced last month. The Department of Insurance already has oversight power over mergers involving for-profit companies. SB 550 and HB 112 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.

"As I have said on several occasions, we must be concerned that 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."

HB112 also includes provisions that preserve the Attorney General's authority regarding oversight of charitable organizations and enforcement of federal antitrust laws. It also establishes an eight-member executive board consisting of the Attorney General, the Secretary of Health, the Secretary of Public Welfare, and appointees by the Governor and each of the four legislative caucuses.

The board would be required to hold at least one public hearing on the merger, consolidation, etc., of a Blue Cross/Blue Shield plan and provide written recommendations, approved by at least six of its members, to the Insurance Commissioner.

In addition, HB 112 states that the Insurance Commissioner could not approve the consolidation of a Blue Cross/Blue Shield plan without the prior written recommendation of at least six board members authorizing the Insurance Commissioner's approval.

"I strongly support protecting and preserving in statute the Attorney General's oversight powers," Senator White said. "I also look forward to reviewing the language of the bill and the House proposal to expand the regulatory oversight procedure and review process. Such a proposal has much merit."

Senator White also mentioned the possibility of adding additional oversight and consumer protection provisions to HB 112.

Contact:

Joe Pittman
(717) 787-8724 or (724) 541-0552 (cell)