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Merged Blues Could Control Half Of Pa. Health Market

By Staff Writer

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Highmark Inc. and Independence Blue Cross have announced plans to merge.

Highmark, Pittsburgh, the holder of Blue Cross and Blue Shield licenses for western Pennsylvania, generated $9.8 billion in revenue in 2005 by covering 4.1 million Pennsylvania residents, and Independence Blue generated $10 billion in revenue by covering 2.6 million Pennsylvania residents and 800,000 residents of other states.

Together, the 2 nonprofit companies provide coverage for more than half of Pennsylvania’s 12 million residents.

The companies did not put a price on their proposed deal, but other companies involved in similar deals have had to compensate the public for purchasing nonprofit company assets by making contributions to charity.

Highmark and Independence Blue say their deal probably will “generate more than $1 billion in economic benefits” for Pennsylvania residents.

Dr. Kenneth Melani, chief executive of Highmark, would be chief executive of the combined company, and Joseph Frick, president of Independence Blue, would be president and chief operating officer.

M. Walter D’Alessio, chairman of Independence Blue, would be chairman of the combined company.