Two of the state’s largest providers of health insurance, Tufts Health Plan and Harvard Pilgrim Health Care, are merging, the companies announced Wednesday, a blockbuster deal that would create a medical powerhouse serving nearly 2.4 million members across New England.
The merger comes amid a period of consolidation and deal-making in the larger medical community, with Beth Israel Deaconess Medical Center and Lahey Hospital combining their hospital systems earlier this year, and health insurer Aetna agreeing to be acquired by the pharmacy chain CVS Health late last year. And Harvard Pilgrim itself had previously toyed with an unusual deal with the giant of Massachusetts medicine, Partners HealthCare, but the talks ended in 2018.
Tufts and Harvard Pilgrim previously sought to combine as well, back in 2011, going so far as to sign a nonbinding agreement that spelled out the broad terms of the deal, but they called it off after concluding the merging of the two operations would be too difficult.
This time, though, the two health plans promised that a combined company would improve the affordability and quality of medical coverage, while also extending the geographic reach and level of care to underserved populations.
The deal is subject to multiple state and federal regulatory approvals. Tufts and Harvard Pilgrim will remain independent companies during the approval process.
The chief executive of the newly merged company would be Tufts Health Plan CEO Tom Crosswell; the Harvard Pilgrim CEO, Michael Carson, would 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. Tufts Health currently has about 2,800 employees, and Harvard Pilgrim has 1,800.
The companies said the new organization, which has not yet been named, “will become one of the region’s largest nonprofit health services organizations.” Each company currently provides coverage to nearly 1.2 million people, and Harvard Pilgrim serve another 2 million across the country through subsidiaries.
This breaking news story will be updated.
Material from State House News Service was used in this report.