City of New York loses suit to un­ravel GHI, HIP merger

Modern Healthcare - - Late News -

The 2nd U.S. Cir­cuit Court of Ap­peals ruled against the city of New York in its an­titrust law­suit at­tempt­ing to un­ravel the merger of Group Health and the Health In­surance Plan of Greater New York, Mod­ern Health­care sis­ter pub­li­ca­tion Crain’s New York Busi­ness re­ported. In Septem­ber 2005, HIP and GHI an­nounced their in­tent to merge and con­vert to a for-profit com­pany. They have since been op­er­at­ing un­der a com­mon hold­ing com­pany, Em­blemHealth. The city of New York filed its law­suit in Novem­ber 2006, ar­gu­ing that HIP and GHI had too large a com­bined mar­ket share among city work­ers, pro­vid­ing cov­er­age to about 92% of en­rollees. A U.S. district judge granted the in­sur­ers’ mo­tion for sum­mary judg­ment in May 2010, and the city ap­pealed. Alan Klein­man, se­nior coun­sel with the New York City Law De­part­ment, said the an­nual tab for the two in­sur­ers to pro­vide cov­er­age to city work­ers and re­tirees is nearly $4 bil­lion. “Now that the court has per­mit­ted the merger, these costs are likely to in­crease,” he said. “The state still has to rule on whether the merger and con­ver­sion to for-profit sta­tus would have a neg­a­tive im­pact, and the city will con­tinue to op­pose the merger.”

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