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August 14, 2019

Harvard Pilgrim, Tufts Health Plan agree to merge

harvard pilgrim hartford HBJ Photo | Joe Cooper Harvard Pilgrim's former office space at the CityPlace II skyscraper in downtown Hartford.
By Joe Cooper and Matt Pilon

Harvard Pilgrim Health Care and Tufts Health Plan announced Wednesday they plan to merge, creating one of the nation’s largest nonprofit health insurers.

While each company is headquartered in Boston, Harvard Pilgrim writes health insurance in Connecticut and has operations in downtown Hartford.

The new organization, which has not yet been named, will improve affordability and health outcomes for members, the insurers said.

“Through the combination of two strong organizations with a commitment to non-profit health care in New England, we will be able to provide even greater value to consumers, as well as improve access to care throughout the region,” said Joyce Murphy, chair of Harvard Pilgrim’s board.

Together, the organizations said they would serve almost 2.4 million members in Massachusetts, Connecticut, Rhode Island and New Hampshire.

As of April 2018, Harvard Pilgrim, which entered the Connecticut market in the summer of 2014, reported having 32,102 fully insured enrollees in Connecticut, plus an additional 1,402 enrollees in self-funded plans.

A company spokesperson did not immediately respond Wednesday afternoon to a request seeking updated Connecticut enrollment figures.

Harvard Pilgrim’s offerings here thus far have been limited to the small group and large group markets. It does not offer individual or Medicare Advantage plans in Connecticut.

However, Tufts began offering Medicare Advantage plans here last year, through a joint venture with Hartford HealthCare, branded as CarePartners of Connecticut.

Harvard Pilgrim was engaged in merger talks in 2018 with Boston-based health system Partners HealthCare, but the deal was later called off, according to the Boston Globe.

The Tufts-Harvard Pilgrim merger, unanimously approved by both boards, is subject to regulatory approvals.

Photo | Tufts Health Plan
Thomas A. Croswell.

With $3.2 billion in 2018 revenue, Harvard Pilgrim is larger than Tufts, but they have a similar number of customers. The two companies said the combined board of directors would have equal representation from each side.
 
The merged board would be chaired by Murphy, Harvard Pilgrim’s current board chair. The remaining board will comprise equal representation from both organizations.

Meanwhile, Tufts CEO and President Thomas A. Croswell will serve as CEO of the new organization and Michael Carson, who serves the same roles for Harvard Pilgrim, will serve as president and oversee the combined entity's business lines and subsidiaries.

Carson was appointed CEO last year after the sudden resignation of Eric Schultz, who cited inappropriate behavior in his resignation letter to the board.

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