Nonprofit health insurer Kaiser Permanente, already a giant in the health care industry, is getting even bigger. The organization reported Friday that it was acquiring Group Health Cooperative, a fellow nonprofit insurer based in Seattle that boasts nearly 600,000 members.

“This agreement is a natural extension of our long, successful working relationship with Group Health and it provides us with the opportunity to expand access to high-quality, affordable care and coverage,” said Bernard J. Tyson, chairman and CEO, Kaiser Foundation Health Plan and Hospitals. “Kaiser Permanente and Group Health Cooperative are a natural fit. The opportunity to unite will allow us to best serve the current and future needs of our members, customers and employees. We look forward to welcoming the people of Group Health Cooperative into the Kaiser Permanente family.”

Kaiser intends for Group Health to serve as an eighth “region” to its national network, expanding coverage on a long stretch of the West Coast from San Diego to Seattle. The two networks have long cooperated with reciprocity agreements. Group Health members could use Kaiser providers and vice-versa.

The two organizations are remarkably similar in some regards. Both were founded in the mid-1940s, and both have similar models of insuring and providing care. The main difference is that Kaiser is much bigger. With more than 10 million members, it is more than 10 times the size of Group Health.

Kaiser is a major player in the health care exchanges created by the Patient Protection and Affordable Care Act. In its home state of California, the 260,000 enrollees it reported in its exchange plans made it the third most popular choice for PPACA consumers, behind Anthem and Blue Cross Blue Shield of California.

The deal is far from settled. Group Health’s membership still has to vote to approve the acquisition and it has to be sanctioned by the Washington State insurance commissioner.

“For those of you who have counted on Group Health to provide you with amazing physicians and clinical teams, and the coverage your family needs, you will continue to receive the best care and coverage available,” said Group Health Physicians President Steve Tarnoff. “I’m joined with my Board of Trustees in fully supporting this new direction for our organization. Joining with Kaiser Permanente is a move that reinforces our commitment and focus on providing the best care for our communities.”

Instant Insights /

Kaiser Permanente to acquire Group Health Cooperative

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