The proposed merger of Pennsylvania's two largest
insurance companies could result in about 1,000 lost
jobs, mostly through attrition, a company executive
Highmark President and Chief Executive Officer Kenneth Melani made the comments after
the U.S. Senate Judiciary Committee held a field
hearing in Philadelphia on the planned merger of
Independence Blue Cross and Highmark, two
not-for-profit companies that are not traded publicly.
The job losses would represent about 3.5% of the
companies' combined workforce.
Philadelphia-based Independence and Pittsburgh-based
Highmark announced plans to merge two weeks ago,
creating the state's largest health insurer with more
than 53% of the market. The combined company will also
be the third-largest Blues plan in the country, after
Wellpoint in Indianapolis and Health Care Service
Corp. in Chicago.
The merger, although in the works for years, brought
swift reaction from lawmakers, with U.S. Sen. Arlen
Specter (R-Pa.) calling for a hearing and the state Senate
passing a bill that would give the Pennsylvania
insurance commissioner power to approve or reject
not-for-profit mergers retroactive to Jan. 1.
''This proposed merger has major implications for the
people in the Commonwealth of Pennsylvania,'' Specter said at Monday's hearing.
Specter, the ranking GOP member on the Judiciary
Committee, was joined by U.S. Sen. Bob Casey (D-Pa.) and Gov. Ed Rendell in grilling the insurers' CEOs and
others. -- by the Associated Press