HealthNow Affiliation with Highmark Misses the Mark for Health Foundation for Western and Central New York

Foundation says the Pennsylvania-Based Health Insurer is Woefully Underfunding the Charitable Contributions to the Communities It Will Serve

The Health Foundation for Western and Central New York is calling for a halt in the HealthNow affiliation with health insurance giant Highmark Health of Pennsylvania until a more equitable agreement can be reached on charitable contributions.

The Foundation says the affiliation will result in hundreds of millions of dollars in New York consumers’ money being funneled out of state, while these same consumers will see little in return from Highmark.

The charitable commitment secured in the Department of Financial Services’ approval of the merger has Highmark contributing $10 million over five years ($2M annually), an amount that is substantially below what is expected in an affiliation of this size and scope.

“This acquisition should be generating as much as twenty times more charitable assets for New York State,” says Cheryl Smith Fisher, chair of the Health Foundation for Western and Central New York’s board of trustees. “During this unprecedented public health crisis, and in regions suffering from clear racial and socioeconomic health disparities, losing out on these funds will put our most vulnerable residents and the nonprofit community organizations that serve them at a grave disadvantage.”

In 2020, HealthNow alone made higher charitable contributions: $5.5 million to Western New York.

Also, further review of recent Highmark-Blue Cross Blue Shield mergers across the country shows significantly more assets have been committed in almost every case. In 2015, Highmark acquired Blue Cross of Northeast Pennsylvania and contributed $90 million to a charity in North East Pennsylvania to support health and wellness efforts.

Other examples include:
• In 2002, Univera Healthcare was acquired by Excellus creating $100 million in charitable assets which formed the Health Foundation for Western and Central New York;
• In 2006, the acquisition of Empire Blue Cross by Wellpoint resulted in $250 million being committed to form the New York State Health Foundation;
• Also in 2006, MVP was acquired by Preferred Care generating $232 million in charitable assets forming the Greater Rochester Health Foundation.

The Health Foundation says the precedent of far larger commitments in charitable assets is significant enough to postpone the final approval of this transaction until commitments for adequate contributions to New York State communities can be secured.