Two of the state’s largest health insurers last week announced plans to merge into a new, combined organization that Harvard Pilgrim Health Care and Tufts Health Plan said would serve nearly 2.4 million members in Massachusetts, Maine, Connecticut, New Hampshire and Rhode Island.
The new organization has not yet been named, and company officials have not said where it will be based—Harvard Pilgrim is headquartered in Wellesley and Tufts in Watertown. The deal is subject to various state and federal approvals, and the two companies will remain independent during the approval process.
According to the State House News Service, the deal amounts to a significant consolidation in the Massachusetts health care insurance market, with two of the largest insurers joining forces and creating a single, larger rival to the state’s biggest insurer, Blue Cross Blue Shield of Massachusetts. Policyholders and consumers will be on the lookout for impacts on them, and the agreement will be also be vetted by government regulators.
In a joint statement, Tufts and Harvard Pilgrim said the combined organization “will be even more effective, better able to keep high-quality health care accessible and affordable, while at the same time investing in programs and initiatives that enhance quality.”
Tufts Health Plan President and CEO Tom Crosswell will serve as CEO, and Michael Carson, currently the president and CEO of Harvard Pilgrim, will serve as president. Both organizations will be equally represented on a board of directors chaired by Joyce Murphy, who now chairs the Harvard Pilgrim board.
The state’s top three commercial payers—Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim and Tufts—account for nearly 62 percent of the private health insurance market membership, according to a Center for Health Information and Analysis report that used September 2018 data.