Tufts Health Plan, Harvard Pilgrim announce merger

Aug. 15--Harvard Pilgrim Health Care and Tufts Health Plan have announced plans to merge, forming what could become one of the region's largest nonprofit health services organizations.

The move, which will serve about 2.4 million members in Massachusetts, Maine, Connecticut, New Hampshire and Rhode Island, is subject to state and federal regulatory review.

According to Gov. Charlie Baker's office, once the entities make a filing for the proposed move, the Massachusetts Division of Insurance will review it according to statutory standards to ensure no disruptions to health care access.

"The Baker-Polito Administration believes that any merger of health care companies should result in greater transparency, lower prices and better outcomes for patients," said spokesman Brendan Moss.

Attorney General Maura Healey's office will also have a hand in the process and may review the merger under antitrust and charities laws. In addition, the health care division of the AG's office may review the move to gauge the impact on consumers and the market.

"Our office has been in touch with both parties and will review the proposed transaction as more information becomes available," said Meggie Quackenbush, a Healey spokeswoman.

The new organization is yet to be named and would provide health coverage in all market segments. The board of directors would comprise equal representation from both organizations and be chaired by Joyce Murphy, currently the chairwoman of the board for Harvard Pilgrim Health Care, it was announced Wednesday.

"Through the combination of two strong organizations with a commitment to nonprofit health care 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 Murphy.

Dr. Alan Sager, a professor at Boston University's School of Public Health, said the merger probably won't provide much relief to consumers.

"Instead of changes like this merger that move us sideways, we need honest reforms that move us forward toward more affordable care and less paperwork and freedom of choice for doctor or hospital," said Sager.

"I don't see much prospect for lower premiums, lower prices, lower out-of-pockets and smaller surprise bills," said Sager adding that mergers are costly and take a lot of time to process.

Amy Rosenthal, executive director of Health Care For All, also expressed concern.

"Consolidation in the health care industry is an overarching concern for consumers, as it can lead to increased costs for individuals and families. We will closely monitor this proposed merger to better understand whether the anticipated efficiencies will actually translate to lower costs for consumers, broader networks and an increase in community investments," said Rosenthal in a statement.

The new organization will offer employer-sponsored plans, Medicare and Medicaid plans, qualified health plans and plans for those who are dually eligible for Medicare and Medicaid.

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