In merger battle, Highmark discovers allies in nonprofits

Central Penn Business Journal, Jul 25, 2008 by Olenchek, Christina

REGION

Highmark Inc. provides millions of dollars to nonprofits throughout Pennsylvania.

Many of the midstate-based organizations are expressing their gratitude by supporting Highmark as it tries to win state approval to merge with Independence Blue Cross.

A lot of the more than 100 public comments posted on the Pennsylvania Department of Insurance's Web site are from nonprofits expressing support of Pittsburgh-based High-mark, which operates as Highmark Blue Shield in the midstate. In March 2007, Highmark announced its in- tention to merge with Philadelphia- based Independence Blue Cross to form a company that would cover several million members. A public hearing about the merger request was held in Harrisburg July 10.

Some of the submitted comments openly promote the merger, while others simply discuss how Highmark has been a good corporate citizen. But both types of comments achieve the same result: They portray Highmark positively as the company battles assertions that the merger will create a monopolistic giant that will squash competition in the insurance market.

"We're pleased that the process is bringing many different points of view into the open," said Michael Weinstein, Highmark spokesman. "The positive comments reinforce the mission of the company, in terms of us being involved in the communities we serve."

The organizations that have submitted positive comments to the Insurance Department include:

* Art Association of Harrisburg

* Family Support of Central Pennsylvania

* Goodwill Keystone Area

* Hope Station

* Keystone Area Council of the Boy Scouts of America

* Lancaster Symphony Orchestra

* Pennsylvania Association for the Blind

* Ronald McDonald House Charities of Central Pennsylvania

The public comments are accessible through the Insurance Department's Web site, www.ins.state.pa.us.

Representatives of several nonprofits that expressed support for Highmark said they didn't intend to get into the fray over the merger.

"I just wanted to say that we feel that they are an excellent presence in our community," said Carrie WisslerThomas, president of the Art Association of Harrisburg. "I wanted to give them a thank you by writing in support of them."

Highmark has supported the Art Association for more than 20 years through sponsorships, grants and other financial support, Wssler-Thomas said. The company and its employees have worked with the association to purchase local art for corporate offices and personal use, she said.

The Boy Scouts' Keystone Area Council in Silver Spring Township has to remain neutral on the merger because it has received money from other insurance companies, said Jack E. Carr, the council's scout executive director.

"I'm not an expert on mergers," he said.

Nonprofits have asked Highmark how they can support the company during the mergerapproval process, Weinstein said. But he said there has been no formal effort to urge organizations to specifically support the merger.

"We have day-to-day relationships with nonprofits and, obviously, the topic (of the merger) comes up," Weinstein said. "I can't say that we don't welcome those letters of support, but it's too strong to say that we have a formal campaign."

It's unclear how, or if, the nonprofits' opinions will affect the Insurance Department's decision about the merger - a decision that could come by the end of the year. The department will consider several factors when deciding. Key among these are how a merger would affect the insurance-buying public and how it would affect competition, said Rosanne Placey, the department's press secretary.

In the end, the decision might not matter much.

Jim Washington, executive director of Hope Station in Carlisle, said he's not worried that his neighborhood-revitalization group will lose funding if Highmark and Independence Blue Cross' request to combine is denied.

"We're (supporting Highmark) because they have been good to us," Washington said. "It's the right thing to do."

BY CHRISTINA OLENCHEK

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