HARRISBURG, Pa. (AP) — Two of the nation's largest not-for-profit health insurers said Tuesday that a new joint venture will provide an opportunity for Blues insurers nationwide to expand into Medicaid coverage just as states are seeking ways to save money in the program and the ranks of Medicaid enrollees is poised to grow.

Philadelphia-based Independence Blue Cross and Detroit-based Blue Cross Blue Shield of Michigan are purchasing AmeriHealth Mercy, which has Medicaid managed-care contracts in various states, including Pennsylvania, Indiana, and South Carolina.

Independence Blue Cross already owns 50 percent of Philadelphia-based Amerihealth. Buying the other half of AmeriHealth will cost $170 million, and the insurers' boards have authorized more than $200 million in additional capital investment. The transaction is expected to close in coming months, company officials said.