Independent Health is joining MVP Health Care’s “family of companies,” the two New York-based insurers announced Tuesday. Regulators in the Empire State will have to approve the affiliation agreement, a process which could take about six months.
The two nonprofits currently serve nearly one million members across New York and Vermont, employ 3,000 people in the region, and take in about $7 billion in combined annual revenue.
Leaders from the two companies were vague about the terms of the deal at a press conference Tuesday, but suggested that the entities would remain distinct.
More from Vermont Public: Open enrollment has started. Here’s what you need to know
The affiliation is “not an acquisition,” MVP CEO Chris Del Vecchio said. It is a “true partnership,” added Independent Health CEO and President Michael Cropp.
Rising health care costs have strained insurer finances in recent years, and Tuesday’s announcement is only the latest example of consolidation in the U.S. health care system. But Del Vecchio sought to frame the MVP-Independent deal as a way to preserve local options for consumers as national players increasingly dominate the landscape.
“Companies like Cigna, CVS and others generate more than half their revenue from non-insurance businesses, moving their focus away from the local health needs and towards shareholder returns,” he said. “National plans prioritize those returns over sometimes care holders or member needs in decisions.”
More from Vermont Public: Vermonters get sticker shock during ACA open enrollment
Health care providers, employers and members should expect “no immediate changes to coverage, benefits, or local personalized service,” according to a press release.
There are no plans for layoffs yet, Cropp said, but the companies would be “looking for efficiencies.” He also emphasized that the two companies believed the deal would help them increase their business, particularly in the pharmacy benefit space.
“Unfortunately, given the nature of the economy and everything that's going on around us, we can't make promises other than being totally transparent with our associates,” Cropp said. “But the vision that we set forth is a vision of growth.”
