Pennsylvanians still have time to give state officials their thoughts about the proposed merger of nonprofit health insurance giants, Highmark and Independence Blue Cross in Philadelphia. If state residents do look at the proposed merger, they are unlikely to see reasons to support it.

For a merger with such potential to impact health care costs across the state, the issue has had too little visibility on the public's radar.

The state Insurance Department did hold three public hearings across the state this summer. And the department is continuing to gather opinions about the merger from the two companies, from outside experts and the public. The public comment period could end as soon as September, however.

Highmark and Independence Blue Cross have produced their own studies, arguing that the a combined company will see big operating savings. Apparently to build political support for the merger, the two companies have agreed to a deal through which the combined company would pay about $1 billion over six years to the state to help fund some of Gov. Ed Rendell's health initiatives.

Some officials in Harrisburg might be tempted, but others, however, see two massive insurance companies getting even bigger and forever stifling competition in the state.

The Pennsylvania Medical Society and the American Medical Association oppose the merger, arguing that the combined company would have too much power to dictate prices — keeping them high — and too much power to control reimbursement payments — keeping them low.

If the merger goes forward, the combined company will control about 65 percent of the health insurance market in the state. It's hard to see how this kind of dominance can be good for consumers.

After blocking prospective competitors from entering the market, the combined company could then pursue a path to become a for-profit corporation, as 14 other Blues across the country have already done.

Another issue critics of the merger point to is the Highmark surplus, which was about $3.6 billion last year. Independence Blue Cross' surplus was $1.7 billion.

Most critics of these huge cash reserves argue they are excessive and that the money should be used to reduce premiums.

Calling the multibillion-dollar reserves "ridiculous," Steve Foreman, a professor of health policy at Robert Morris University, said that the nearly $4 billion surplus represents excessive charges by Highmark to employers in the region. The excessive charges are possible, Foreman suggests, because Highmark faces little competition.

The nonprofit status of the Blues and the associated tax advantages also play a role in allowing the two companies to sock away more than $5 billion in reserves.

Critics of the merger worry that Highmark, or the merged Highmark-Independence company, could someday decide to swith to for-profit status, which is what is happening in New Jersey, where Horizon Blue Cross, the state's largest health insurer, has filed an application to switch to for-profit status.

The switch to for-profit status could make the company a takeover target and would enrich top executives.

Unlike most doctors and hospital officials, who oppose the deal, the top officials of Highmark and Independence have testified about the need to merge the companies to be able to compete in the future with national health insurers.

Whether or not the merger is justified in the long run, it does have something to offer the one of the CEOs in the near term. Highmark's top officer would see his pay increase to $3.9 million from $2.97 million as CEO of the combined company, according to documents recently filed with the state. The salary of the Independence chief executivewould remain at $2.94 million a year, after having jumped substantially from just $1.6 million in 2006.

Most doctors and hospitals oppose the merger. And most newspapers in the state criticize the plan, with a Philadelphia Inquirer editorial concluding there are riches for the company and their executives, but the "public gets the crumbs."

Other than the wealth and lobbying clout of Highmark and Independence Blue Cross, there seems to be little reason for the merger to be approved.

— J.L.W.III