SPRING VALLEY — The recent spate of mergers between health insurers may not be in the public's b... Watchdog: Insurance mergers | Life Insurance
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SPRING VALLEY — The recent spate of mergers between health insurers may not be in the public's b... Watchdog: Insurance mergers

SPRING VALLEY — The recent spate of mergers between health insurers may not be in the public's best interest, a consumer watchdog said yesterday.

"We might end up with just a handful of big insurance companies covering New Yorkers," said Charles Bell, programs director for Consumers Union, the Yonkers-based nonprofit group that publishes Consumer Reports.

Consumer advocates fear that mergers and conversions of nonprofit health insurers to for-profit companies might reduce service levels to patients and hurt state taxpayers.

Consumers Union is calling on state lawmakers to enact laws that ensure greater public disclosure, spell out the impact on residents and guarantee that revenues from the deals enhance health coverage.

Last month, Wellpoint, the largest health insurer in the U.S., agreed to pay $6.5 billion for Wellchoice, the parent company of Empire Blue Cross and Blue Shield insurance, the largest health insurer in New York state.

"Should any company have that large a piece of the business?" said Bell, who was the guest speaker at a meeting of the Rockland County chapter of the New York Statewide Senior Action Council at the Rockland Community College annex in Spring Valley.

GHI and HIP of Greater New York, both of which are statewide, nonprofit health insurers, also agreed to merge last month. They have a combined membership of more than 4 million in the metropolitan area and combined revenues of more than $7 billion. The proposed merger would create the largest health insurer in the state, and Bell anticipated the new company would attempt to convert to a for-profit.

In 2004, UnitedHealth Group acquired Oxford Health Plans Inc. for about $4.9 billion. The merger created one of the largest health insurers in the Northeast, covering nearly 1.7 million people in New York City, its northern suburbs and southern Connecticut.

Bell said while there might be advantages to the mergers — more power to negotiate with hospitals and doctors to keep reimbursements rates down — there also might be drawbacks, such as reduced levels of patient services and huge companies that could influence laws passed in the state.

Thea Zendell, a Suffern resident and retired epidemiologist nurse at Lawrence Hospital Center in Bronxville, said she was unaware of all the mergers taking place.

Other senior citizens said they were too busy trying to figure out the new Medicare prescription drug plan to lobby their elected officials about mergers of the mega-health care companies.

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admin – Sat, 2005 – 10 – 29 11:00