Georgia health plans $4.4B merger with Kaiser to increase coverage


— The combined entity that is being formed by two of the nation’s largest insurers will cover more people and provide more coverage for more people than any other health insurer, expanding the number of Georgia residents who could gain coverage through a deal that could raise hundreds of millions of dollars for Georgia hospitals and doctors.

The merger, which was first reported by The Atlanta Journal Constitution on Wednesday, is expected to cost the state nearly $4 billion.

Georgia will become the first state to combine two insurers, joining three others that have already merged.

State officials expect that, by 2019, Georgia will have more than 700,000 residents with health insurance coverage under the new company, which will be called Kaiser Permanente.

The merged company will be led by the insurer’s chief executive, David Hinkle, and be called Anthem Blue Cross and Blue Shield of Georgia.

It’s the latest in a string of mergers and acquisitions that Georgia has been working on to expand its health care options.

In August, the state legislature approved a plan to merge two insurers with Anthem BlueCross BlueShield of Georgia and the Georgia Medical Group, a unit of Aetna Inc. The new entity will be responsible for covering about 765,000 Georgians and providing more coverage than any of the other insurers combined, state officials said.

This merger will have the most impact on people who already have coverage through the existing insurance marketplace, officials said, with people who qualify for the state’s new marketplace being able to get coverage through Anthem Blue, the group said in a news release.

At least one other state, Vermont, is already working to expand access to the existing marketplace through Anthem, and Anthem and other insurers have been involved in talks to purchase some Vermont hospitals, according to a statement from the Vermont Department of Health.

“We are excited about the prospects of Georgia expanding coverage to our residents, and are grateful for the support from the Georgia Legislature, the Governor and the citizens of Georgia, as we continue to build on the success of Anthem BlueMedica,” Anthem CEO David Hingle said in the statement.

Hinkle said in August that Anthem Blue would cover more than 3.4 million Georgians.

He added that he expected the combined entity to cover more residents than any health insurer in Georgia.

The Georgia Department of Insurance said in its statement that the new entity would cover roughly 6,200,000 Georgia residents.

Aetna said it was excited about joining the new health insurance industry and expanding coverage.

“Aetnam is committed to providing quality, affordable health care to our Georgia customers,” Aetnam CEO Mark Bertolini said in an emailed statement.

“As part of the merger, Anthem will remain an integral part of Georgia’s health care delivery system.”

Anthem has not said how much of its merger value it expects to receive in fees or premiums from the deal.

Kaiser Permanency said in early August that it was pleased to be joining forces with Anthem and its parent company, Blue Cross BlueShield, to expand coverage in Georgia and that it expects Anthem’s merger value to increase significantly.

About 765 million Georgian residents have private health insurance through the state marketplace, according the Georgia Department Of Insurance.

Anthem has said that about 665,500 of the new employees who would be eligible to receive health coverage through Georgia HealthCare are currently enrolled in the marketplace.

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