Two not-for-profit Massachusetts-based health insurers, Harvard Pilgrim Health Care and Tufts Health Plan, announced Wednesday that they have agreed to merge.
The yet-to-be-named combined company will serve about 2.4 million insurance members in Connecticut, Maine, Massachusetts, New Hampshire and Rhode Island in employer-sponsored, Medicare, Medicaid and Affordable Care Act individual plans.
In a joint statement, the health insurers said their merger will improve the affordability of coverage through scale and administrative cost efficiencies while improving quality through investments in population health. They also said that together, they would better enable care for underserved communities and offer a broader set of insurance options for all customers.
The insurers did not disclose the financial details of the combination. A Tufts spokeswoman declined to comment beyond the news release.
Harvard Pilgrim reported net income of $80.1 million on revenue of $3.2 billion in 2018. Tufts Health Plan reported net income of $130.4 million on revenue of $5.35 billion last year. Both reported membership of 1.2 million at the end of 2018.
"Our communities and consumers today face four major hurdles in health care: affordability, access, quality of health and a fragmented health care experience across various stakeholders and health systems. Through our shared vision, we believe we can tackle these issues and bring more value to the communities we serve," Tom Croswell, president and CEO of Tufts Health Plan, said in the news announcement.
Croswell will serve as the CEO of the combined company, while Harvard Pilgrim President and CEO Michael Carson will serve as president. The health insurers said the new company's board of directors will have equal representation from both organizations.
"Through the combination of two strong organizations with a commitment to nonprofit healthcare in New England, we will be able to provide even greater value to consumers, as well as improve access to care throughout the region," said Joyce Murphy, chair of the board for Harvard Pilgrim Health Care.