Pennsylvania's health insurance giant, Highmark, hopes to grow by adding Blue Cross of Northeastern Pennsylvania at a time both companies are adjusting to the federal health care law.
The companies announced Tuesday that they submitted a merger filing to the state Department of Insurance.
Insurance Commissioner Michael Consedine says he will review the proposal to ensure that it protects consumers and maintains a competitive insurance market.
The Insurance Department is required to give notice of the filing to the state attorney general's office, which can decide whether to get involved, according to the department.
A spokesman for the attorney general's office, which has consumer protection and anti-trust divisions, declined to comment.
Highmark has 4.3 million Pennsylvania customers; Blue Cross of Northeastern Pennsylvania has 550,000.
The combined companies would have about $16 billion in annual revenue, and a merger would expand Highmark's Pennsylvania blueprint from 49 counties to 62, all but five of the counties in the state.
"It really is about making sure we have seamless products for employers and individuals who are doing business throughout Pennsylvania," Highmark spokesman Aaron Billger said.
The companies are already familiar with each other, with Highmark holding ownership stakes in Blue Cross of Northeastern Pennsylvania's managed care and life insurance subsidiaries, Billger said.
Highmark already calls itself the fourth-largest Blue Cross and Blue Shield affiliate, and the 10th largest U.S. health insurer by membership.
For Highmark, the move is the latest in a rapid expansion that included the purchase of the troubled West Penn Allegheny Health System and mergers with Blue Cross/Blue Shield plans in West Virginia and Delaware.
A proposed merger with Philadelphia-based Independence Blue Cross, which covers Philadelphia and four southeastern Pennsylvania counties, was abandoned in 2009 amid resistance from state insurance regulators.
Meanwhile, the state's Blue Cross/Blue Shield insurers have tried aggressively to sign up new customers through the insurance marketplaces created by the federal health care law, although Billger acknowledged that Highmark is behind its goals because of glitches that plagued the gateway HealthCare.gov website in October and November.
A merger also could open a new front for Highmark to compete in health care delivery, although Billger said it is too soon to begin thinking about acquiring hospitals in northeastern Pennsylvania.
Highmark took over the financially troubled West Penn Allegheny Health System last year and has been looking to increase its provider network because the University of Pittsburgh Medical Center is refusing to renew its reimbursement agreement with Highmark.
The West Penn hospitals are now part of Highmark's seven-hospital Allegheny Health Network.