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The merger of two of Massachusetts’ largest health insurers could have a profound effect on consumers and the health care market.

After Harvard Pilgrim Health Care and Tufts Health Plan this week revealed plans to combine into a regional health insurance powerhouse spanning most of New England, the specific impacts remain to be seen, but the deal is certain to be closely scrutinized.

Even after merging, Tufts and Harvard Pilgrim would remain smaller than their prime competitor, Blue Cross Blue Shield of Massachusetts. But the fact that they signed an agreement to merge is significant: Many merger discussions fall apart before they ever get to that step.

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The two nonprofit insurers are similar in size, but different in important ways. Harvard Pilgrim concentrates almost entirely on commercial business, essentially selling insurance through employers. Tufts, meanwhile, has developed a reputation for managing care for low-income individuals on Medicaid, as well as seniors on Medicare.

The merger still needs regulatory approvals. Here’s what to watch as the deal moves forward:

What it means for consumers

Companies that want to merge tend to make the same basic argument: together, they can be more efficient and cut costs.

Tufts and Harvard Pilgrim executives declined interviews this week. But in a joint statement Wednesday, they said merging will give them “scale and administrative cost efficiencies,” allowing them to offer consumers more affordable health plans.

That is one possibility — especially if the insurers use their combined market power to hold down hospital and pharmaceutical costs. But research has shown that consolidation can reduce competition and raise costs.

“We’ll have to assess carefully what the effect will be on prices and affordability of health insurance,” said Nancy Turnbull at Harvard T.H. Chan School of Public Health.

“We know that consolidation can lead to higher prices,” she said by e-mail. “But the consolidation train left the station a long time ago, and we didn’t stop it. So I think this merger is a far preferable option to either or both plans being acquired by large for-profit health insurers.”

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For current card-carrying members of Tufts and Harvard Pilgrim, nothing is likely to change right away. In the long run, consumers could see a change in health plan offerings and benefits.

How it changes the health care market

Tufts and Harvard Pilgrim stunned many people with their merger announcement. But notably, doctors, hospitals, and the state’s largest health insurer, Blue Cross, are not raising alarms about the merger — at least not yet.

“As physicians who care for patients in Massachusetts, we value all our local nonprofit health plans,” Dr. Maryanne C. Bombaugh, president of the Massachusetts Medical Society, said in a statement.

But Bombaugh said she didn’t want to guess what a Tufts-Harvard Pilgrim merger would look like. “We will rely on the process of review from state and federal regulators,” she said.

Hospital consultant Ellen Murphy Meehan said the merger could free up money for important investments — if the companies are able to consolidate their costs.

“Ideally, we would see this merged entity carve a new path where consumers and community providers are offered more resources and tools to manage chronic illness,” she said in an e-mail.

Officials at Blue Cross will be watching the deal closely. They are raising questions about the merger — will it truly help consumers? — but are not openly objecting to it.

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The complicated review process

Tufts and Harvard Pilgrim need to file their plans with regulators in the five states where they conduct business — Massachusetts, New Hampshire, Connecticut, Maine, and Rhode Island. They also expect a review from the US Department of Justice.

The approvals could take up to a year, or longer.

In Massachusetts, the Division of Insurance and the attorney general’s office are expected to review the deal.

(The state Health Policy Commission, a watchdog agency that monitors costs, does not have the authority to review insurance mergers).

Regulators will have to evaluate if the merger will reduce — or strengthen — competition, said Harvard Business School professor Leemore S. Dafny.

“Consumers, myself included, want to make sure regulators are really carefully assessing what could be the benefits [of the merger],” she said.

Last year, Attorney General Maura Healey approved another big health care deal, the combination of Beth Israel Deaconess Medical Center and Lahey Health — but with price caps and other conditions.

A Tufts-Harvard Pilgrim merger also could be subject to conditions, such as premium caps, or requirements to invest in community health initiatives.

“We don’t know their vision,” Dafny said. “That’s going to matter. Why is it only achievable jointly, and not separately? Does it have enough benefit to consumers that it’s worth taking out an option in the marketplace?”


Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.

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