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Tufts and Harvard Pilgrim complete merger, creating big new health insurer

Tom Croswell, left, former chief executive of Tufts Health Plan, will be chief executive of the new company. At right, Michael Carson, who was chief executive of Harvard Pilgrim, will be president.David L. Ryan/Globe Staff/file

Two of Massachusetts’s largest health insurers have merged into one.

Tufts Health Plan and Harvard Pilgrim Health Care said Monday that their union became official Jan. 1, after receiving approvals from state and federal regulators.

Together, Tufts and Harvard Pilgrim will serve 2.4 million people and become the state’s second-largest health insurer.

The new company plans to unveil a new name in the coming months and will move to a new headquarters in Canton by the end of the year — though most of their employees are currently working from home during the coronavirus pandemic. Tufts has been based in Watertown and Harvard Pilgrim in Wellesley.


For the time being, consumers may not notice much difference. The company will continue using the Tufts and Harvard Pilgrim brand names and does not plan to change benefits, programs, or services this year.

Over time, executives of the new nonprofit company said they plan to develop tools that help their customers better navigate the health care system.

“Coming together is not about getting better returns for shareholders. We’re doing this because it will deliver better value to all of our various stakeholders, most importantly the individuals who choose our insurance products,” said Tom Croswell, chief executive of the new company. Before the merger, Croswell, 71, was chief executive of Tufts.

Executives expect to save more than $100 million a year through the merger and said they will use the savings to offset premiums and out-of-pocket costs for members. Some of the savings will come from job cuts. Executives expect to slash 125 jobs this year — about 3 percent of the workforce — through layoffs and attrition, many of them in leadership positions.

They said they don’t plan to use their greater market clout to charge more for health insurance — doing so would cost them customers.


“If our price point isn’t right, then we can basically price ourselves out of the market,” said Michael Carson, 52, who was chief executive of Harvard Pilgrim and is serving as president of the new company.

The transaction could impact total health care spending in the state, Stuart Altman, chairman of the Massachusetts Health Policy Commission, said in a statement.

“We expect to monitor the merged company to ensure that it realizes its goals of achieving efficiencies and passing along those savings to the Massachusetts employers and individuals who pay premiums, while improving quality and access to care, particularly for vulnerable and underserved populations,” he said.

The new insurer is the second-biggest in the state behind Blue Cross Blue Shield of Massachusetts, which has 2.8 million members. It also competes with several national insurers.

Tufts and Harvard Pilgrim also sell health plans in other New England states. The US Department of Justice reached a settlement with Tufts and Harvard Pilgrim last month that allowed the merger under the condition that Tufts sell its business in New Hampshire. Tufts spun off that division, Tufts Health Freedom Plan, to UnitedHealthcare. The new merged company will continue selling insurance in New Hampshire under the Harvard Pilgrim name.

The Massachusetts Division of Insurance approved the merger on Christmas Eve. Officials in Attorney General Maura Healey’s office investigated the transaction and took no action to stop it, but in a letter, they said the new merged company should work to expand access to needed health care services and contain costs for consumers, among other commitments.


Amy Rosenthal, executive director of Health Care For All, said the consumer advocacy group hopes the new company will work to enhance behavioral health services and make investments that promote health equity. She also urged company leaders to continue serving low-income individuals who receive subsidized health coverage.

Tufts and Harvard Pilgrim first revealed that they were planning to merge in August 2019. They previously attempted a deal in 2011, but those talks fell apart.

Priyanka Dayal McCluskey can be reached at Follow her on Twitter @priyanka_dayal.