Over the last several weeks, the buzz has picked up as officials from the two companies have briefed health-care industry stakeholders in Harrisburg on the proposed combination, which regulators term a "consolidation."
One person familiar with those briefings said executives had argued that a merger would result in a stronger Pennsylvania-based company and that the consolidated enterprise would be committed to the state on everything from jobs and purchasing to the traditional social mission of the Blue Cross Blue Shield plans.
A combined company would face regulatory hurdles at state and federal levels. One issue would be whether the massive size of the two insurers might create an anticompetitive monopoly.
Highmark spokesman Michael Weinstein did not return numerous calls yesterday, and Elizabeth Williams, Independence's spokeswoman, had little to add. "We're in the same situation that we've been in for a while," she said. "We're talking with them about it and trying to decide if it's the best thing to do."
In 2004, Independence collected about 28 percent of Pennsylvania's $28 billion in yearly health insurance premiums. Highmark was right behind with 27 percent, according to statistics from the state Insurance Department. But Highmark's out-of-state operations make it a bigger company.
Highmark has more than 4.1 million members in Pennsylvania, while Independence has nearly 3.4 million members. The Pittsburgh company has more than 12,000 employees. Independence has nearly 10,000 workers.
Sam Marshall, president of the Pennsylvania Insurance Federation, said any combination between the two would create the state's largest health insurer. "What you will have is one insurer that is by far and away the dominant insurer in a major line. You don't see that in other types of insurance."
