That is a geographic and logistical split the two
The two insurers are betting that despite the distance -- and by sharing resources, a corporate backroom and advanced data -- they can reduce costs, improve quality and develop new services more efficiently.
As part of the agreement, the companies will merge corporate management under the
The affiliation between the two insurers, which will not have a financial transaction related to it, is unusual and surprised many who watch the insurance industry in
Blue Cross NC reported
The merger won't cause premiums to go up, a spokesman said, but it could have an impact on headcounts at the two companies, which both employ thousands. "Our goal is to always have premiums as low as possible, and we believe this gives us the best opportunity to achieve that goal," Blue Cross NC spokesman
"While it is not clear what is going to come of it, it doesn't appear to have cost much to try it," said
Blue Cross NC and Cambia are both large players in their respective regions. Cambia's health plans include a network of
"It is like the ACC and PAC-12 combining,"
Some seem to think the combination could lead to more affiliations going forward -- with the new
"I don't quite get what the complementaries are here," said
The health insurance market has for years become more consolidated, with a few larger insurers dominating the national market. But the
Mergers like the Blue Cross NC-Cambia one "have been once-in-a-blue-moon types of transactions,"
Hall wonders if it could be a different form -- or protection from -- what another collection of insurers,
"Does this set the stage for another merger. You form a structure that bridges two parts of the country -- conceivably that structure could become larger,"
Richman said if that were to happen it might be a good thing. He doesn't believe there is enough competition at the national level among health insurers.
"This is an acquisition that on its face does not appear to increase any market power, and that is in part because they are so far away from each other," he said. "... But this might signal that these two Blues might be thinking about national business and creating national competition, and that would be a good thing."
"My concern is that
Several years ago, Blue Cross NC became the only insurer to offer Affordable Care Act plans in all 100 counties in
But Silberman wonders how decisions like that could change. Going forward, the Cambia board will be split between nine current Cambia board members and 10 people on the Blue Cross NC board. Blue Cross NC will retain a separate board of trustees, the companies said.
"Had this (deal) been done three years ago would this new board have pulled out and not have covered the uninsured?" Silberman said. "
The combination will need regulatory approval in five states and will likely be watched with a lot of interest around the country.
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