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Massachusetts insurance giants in discussions over possible mergerPosted On Wed, January 26, 2011 Two New England insurance companies may be joining forces to take on the Bay State's leading insurance provider, Blue Cross Blue Shield of Massachusetts.
Harvard Pilgrim Health Care and Tufts Health Plan have signed a non-binding memorandum of understanding, which is the first step in a series of steps that would unite the two health insurance companies.
In a statement, Eric Schultz, president and CEO of Harvard Pilgrim Health Plan said of the proposed merger, “We feel that a regional health plan will create value for the customers, employers and the communities we serve as well as the broader health care marketplace.”
James Roosevelt, president and CEO of Tufts Health Plan echoed Schultz' sentiments, saying he believes the two insurance companies are like-minded in their attempts to lower health insurance costs, which have become "unsustainable." He further stated that joining forces has the potential to help lower costs while improving healthcare quality for its customers.
Should the two companies unite, the merger would be subject to regulatory review by the state's department of insurance as well as the Department of Justice.
While several smaller health insurance companies operate in Massachusetts, critics of the merger told WBUR it could lead to increased premium rates over time by forcing smaller companies to leave the state.
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