Ritter Insurance Marketing, Craig Ritter

Blue Cross of Northeastern PA to Merge into Highmark

Currently, there are 4 Blue Cross Blue Shield affiliates in Pennsylvania.  Assuming the closing of this recently announced merger, there will be 3.  Blue Cross of Northeastern PA (BCNEPA) has about 500,000 insurance subscribers and about $750 million in annual revenue.  Their stated surplus is $258 million at the end of 2012.

As a part of the merger, Highmark and BCNEPA will donate $100 million to a charity to promote the health and economic development in BCNEPA’s subscriber area.

In the past, Highmark and BCNEPA had collaborated on some products, including Medicare advantage.  BCNEPA’s desire to merge had more to do with their need to achieve economies of scale to effectively compete in light of the Affordable Care Act.

The primary remaining competitor in Northeastern PA is Geisinger Health Plan.

The merged companies will have approximately 5 million members, revenues of $16 Billion, and will cover 62 of the 67 counties in Pennsylvania.  The remaining Blue Cross affiliates in PA are Independence Blue Cross and Capital Blue Cross.

More details on the story can be found on the Insurance News Net website.

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