Highmark Blue Cross In Deal With New York’s HealthNow Plan

Blue Cross and Blue Shield plan Highmark said it will expand into western and northeastern New York via an “affiliation agreement” with HealthNow New York Inc. in a major consolidation of health insurance plans in the northeastern U.S.

The deal announced Tuesday combines the operations of two Blue Cross Blue Shield health insurance companies that will put expand the reach of Highmark into HealthNow’s “8-county Western New York and 13-county Northeastern New York service areas,” the insurers said Tuesday. Already, Highmark has more than 5.6 million health plan enrollees in Pennsylvania, Delaware, and West Virginia and that health plan membership will grow to more than 6 million once the deal closes.

The arrangement, which the companies are describing as an “affiliation,” means Highmark Health will become the primary licensee of the Blue Cross and Blue Shield Association in HealthNow’s services areas. Financial terms weren’t disclosed for the deal, which is subjected to state and federal regulatory approvals.

The deal continues the ongoing consolidation in the healthcare industry, particularly among health insurance companies. CVS Health two years ago bought the nation’s third largest health insurer in Aetna while the health insurer Cigna bought the big pharmacy benefit manager Express Scripts.

HealthNow chief executive officer David Anderson described the “affiliation is good for the people and communities we serve.”

HealthNow, which will be branded “Highmark Blue Cross Blue Shield of Western New York and Highmark Blue Shield of Northeastern New York,” said it will keep its headquarters in Erie County in New York and its “regional office in Northeastern New York/Albany County, New York.” 

“Highmark has a unique business model, organized around the principles of partnership between payers and providers,” Anderson said. “In addition, Highmark has been a leader among the Blues and in the broader industry in developing new capabilities and innovative Blue Cross Blue Shield products from which our members and customers will benefit.”

Highmark president Deborah Rice-Johnson said the affiliation “will preserve the strong presence of a not-for-profit Blue organization that is committed to the health and vitality of the local communities it serves.”