The mergers among health plans continued yesterday, with New York’s GHI and HIP announcing their intention to join forces to create the state’s largest single health plan. With four million members and $7 billion in revenues, the not-for-profits would dominate the New York metropolitan area, with especially strong market share in the municipal, blue- and pink-collar demographics.
HIP, the smaller of the two plans with 1.4 million members, also owns Vytra Health and Connecticare. The Connecticare acquisition was one of the more intriguing deals in recent years, as it combined two different models with distinct membership demographics, while adding broader geographic coverage to HIP. The company recently announced plans to acquire a high-deductible health insurance provider, PerfectHealth Insurance Co.
GHI covers 2.6 million members in the NYC, upstate, and northern New Jersey area, covering over 2/3 of City employees. GHI has extensive experience in administering governmental programs including state contract work on mental health, coordination of benefits, and Medicare + Choice.
We have been following this trend for quite a while, and with the two largest not for profit health plans in the nation’s most concentrated market merging, it is even more clear that consolidation will continue and likely accelerate. The merger sets up an interesting battle between the merged entity, the Oxford-United combination, and Wellpoint – Wellchoice for share in this key market.
What does this mean for you?
If you run a health plan or TPA in the NYC area, batten down the hatches; there will be a lot of collateral damage to smaller insurance and health coverage providers as these three giants go at each other.
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