In the midst of turmoil over mergers in the for-profit insurance industry, the biggest non-profit carrier is also looking to make a deal to become even bigger.
The Kaiser Foundation Health Plan has long floated the idea of buying Group Health Cooperative, a Seattle-based organization that offers insurance and care to about 600,000 people in Washington state and Idaho. Officials at both organizations signaled support for the deal in December.
This week they took another step towards the merger, as Kaiser finally submitted its application to acquire the smaller group. The deal that has to be approved by the 27,000 voting members of Group Health as well as state insurance regulators.
Group Health has about $3.5 billion of annual revenue, while Kaiser clocks in at over $60 billion.
Kaiser has offered $1.8 billion for the acquisition. It also offered a number of financial incentives to co-op members, including a pledge to spend $1 billion over the next decade on capital improvements for Group Health.
"Group Health and Kaiser Permanente share a belief that their integrated care and coverage models deliver superior quality, service, access and affordability compared to traditional health plan and provider models," says the proposed contract between the two parties.
Consumer advocates have raised concerns about decreasing competition in health care, both among insurers and providers. The concerns have spiked this year amid a huge wave of hospital and insurer mergers, notably the proposed mergers between Aetna and Humana and Anthem and Cigna.
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