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Highmark, HealthNow New York announce affiliation

PITTSBURGH — Highmark Inc. and HealthNow New York Inc. have announced an agreement to affiliate, marking a milestone in plans to join the two not-for-profit Blue Cross Blue Shield health insurance plans to better serve Western and Northeastern New York and Highmark’s Pennsylvania, Delaware and West Virginia regions.

“The objectives driving this affiliation are focused on our shared desire for better health solutions for HealthNow members that can increase customer and clinician engagement, create better health outcomes, manage costs and improve affordability,” said David Holmberg, chairman of Highmark. “This affiliation will also enable HealthNow to take advantage of Highmark’s resources, tools and advanced technologies.”

Under the terms of the agreement, Highmark’s parent company, Highmark Health, will become the primary licensee of the Blue Cross and Blue Shield Association for HealthNow’s eight-county Western New York and 13-county Northeastern New York service areas, pending regulatory approvals and satisfaction of other closing conditions.

“This affiliation is good for the people and communities we serve. Highmark has a unique business model, organized around the principles of partnership between payers and providers,” said David Anderson, president and CEO of HealthNow. “In addition, Highmark has been a leader among the Blues and in the broader industry in developing new capabilities and innovative Blue Cross Blue Shield products from which our members and customers will benefit.”

With its history of affiliations, Highmark understands how to ensure members receive the benefits of additional resources and breadth of offerings while preserving the local identity and focus of a regional, mission-driven company. In fact, the affiliation agreement unanimously approved by the respective health plans’ boards of directors contains provisions that are designed to preserve HealthNow’s strong historical presence in Western and Northeastern New York. For example:

* HealthNow will maintain its headquarters in Erie County, N.Y., as well as its regional office in Northeastern New York/Albany County, New York.

* HealthNow will be branded Highmark Blue Cross Blue Shield of Western New York and Highmark Blue Shield of Northeastern New York, preserving the health plan’s local identity.

* Highmark recognizes the importance of local influence over healthcare decisions and the importance of a local market presence. This includes recognition of the value of maintaining jobs in the local affiliate’s market and minimizing disruptive impacts on the local workforce.

* HealthNow Administrative Services, with locations in Blue Bell, PA and Sacramento, Calif., will also be part of the proposed transaction, maintaining TPA services for more than 100,000 customers.

“Highmark has a strong track record of successful relationships and affiliations with other Blue Cross and Blue Shield companies,” said Deborah Rice-Johnson, president of Highmark. “This affiliation will preserve the strong presence of a not-for-profit Blue organization that is committed to the health and vitality of the local communities it serves.”

Together, Highmark and HealthNow provide health insurance plans that serve nearly 6 million members. Both organizations have been recognized for service and have a legacy of support to the community.

Skadden, Arps, Slate, Meagher & Flom LLP are attorneys for Highmark. Harter Secrest & Emery was legal counsel to HealthNow.

Highmark serves more than 5.6 million members in Pennsylvania, Delaware, and West Virginia. Health Now in 2019 had revenues of $2.8 billion and reserves of $702 million.

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