U.S. agencies OK merger of insurers
FTC and Justice Dept. cut waiting period for Independence-Highmark combination to close.
The Federal Trade Commission and the Department of Justice's antitrust division have put their seals of approval on the proposed merger of Independence Blue Cross and Highmark Inc.
"This is a really positive sign that they did not find any antitrust or any competitive issues," said Independence Blue Cross spokeswoman Elizabeth Williams.
The two agencies, which investigate mergers for possible antitrust violations and the dampening of competitiveness, granted the state's two largest insurers' request for an early termination of the waiting period under the federal Hart-Scott-Rodino Act.
The departments said they have granted those early terminations if the proposed merger complied with all the rules and if both agencies had completed their reviews and decided not to take any enforcement action against the merger.
"The Justice Department's clearance confirms our position that the proposed combination of Highmark and IBC will have no adverse effects on competition in Pennsylvania," Highmark spokesman Michael Weinstein said in a statement.
The federal departments granted the insurers' request Tuesday.
The proposed merger between Independence Blue Cross of Philadelphia and Highmark of Pittsburgh would put the combined company among the top five largest health insurers in the nation.
The new firm would be the largest in the state.
Pennsylvania doctors, hospitals, lawmakers and consumer advocates have expressed concerns that the merger would squelch competition. The firms said it would improve coverage for the uninsured and hold down costs for subscribers.
Lance Haver, director of consumer affairs for the City of Philadelphia, said he was not surprised that what he called the Bush administration's big-business orientation would result in a quick pro-merger decision.
"It makes no sense for them to make a decision prior to the state doing all the research. You have a process on a state basis that takes months and months and months and a process on a federal basis that takes a few weeks."
Describing the departments' rulings as a "significant milestone," Williams said that "Independence is committed to continuing to work with the Pennsylvania Insurance Department, state officials, the legislature, and other stakeholders in an open and thoughtful review process."