Wednesday, November 19, 2008

Newspaper: Reject insurance merger

Pennsylvania's largest newspaper is urging the Rendell Administration to block a planned merger of the state's two giant Blue Cross health insurers.

Less competition will mean higher insurance costs for Pennsylvania residents, argues The Philadelphia Inquirer.

From an editorial in today's edition:
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.

Such dominance would frighten potential competitors from even thinking about entering or expanding in Pennsylvania. As a result, hospitals, doctors and employers in this state would remain at the mercy of an even bigger insurance giant.

The Blues have already been passing along double-digit rate increases to consumers for several years. Without the threat of any competition, the likelihood of future rate increases would grow even larger.
The newspaper cautions the Blues have a lot of political clout: "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."

Read the full editorial at the newspaper's Web site.

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