Harvard Pilgrim, Tufts Insurance Merger Faces Scrutiny; Regulators Want Divestiture
Federal and state regulators are opposing a major health insurance merger between Harvard Pilgrim and Tufts Health Plan, now called Health Plan Holdings, but say the deal can still move forward if Tufts agrees to sell off its New Hampshire operations to a rival company.
Citing the risk of less competition and increased prices, the U.S. Attorney and the state Attorney General filed an antitrust lawsuit on Monday.
“The combination of Harvard Pilgrim and Health Plan Holdings - two of the largest suppliers of health insurance in New Hampshire for certain employers purchasing group coverage for their employees - into one firm would likely lead to higher prices, lower quality, and reduced choice for consumers of commercial group health insurance in New Hampshire,” the lawsuit alleges.
The government, however, also filed a proposed resolution that would allow the merger to continue as long as Tufts sells off its New Hampshire arm, known as Tufts Freedom, to UnitedHealth Group.
The plan still requires the approval of a federal judge.
“By bringing this antitrust action, the Department of Justice is working to ensure that consumers in the Granite State have adequate and affordable health insurance options,” said U.S. Attorney Scott Murray in a statement.
Harvard Pilgrim and Tufts Freedom currently compete in New Hampshire in the small and mid-sized group market, which consists of plans sold to businesses that employ under 100 people. Regulators say Tufts Freedom’s entry into the market in 2016 helped drive down prices, and that the firms represent two of the three largest competitors in the market.
Both entities are based in Massachusetts and do substantial business across New England. Harvard Pilgrim has annual revenues of $3 billion, while Health Plan Holdings brings in $5.5 billion in revenues.
The proposed settlement would grant United the opportunity to hire employees from Tufts, and allow it to extend contracts with health care providers in New Hampshire during the transition.
Regulators said they saw no need to file antitrust litigation in Massachusetts, saying the deal “was unlikely to substantially lessen competition there.”