Article: Bay State Health, Blue Cross to merge

Blue Cross and Blue Shield of Massachusetts said yesterday it would merge with ailing Bay State Health Care, the state's second largest health maintenance organization, in a deal that will create a health insurance giant with 2.4 million subscribers.

Blue Cross said it would assume all the assets and debts of Bay State, which reportedly is sitting on a deficit of about $100 million. Blue Cross plans to maintain Bay State as a separate division with a separate name. Three Bay State board members will join Blue Cross' board of directors.

Financial terms of the deal were not disclosed. Executives of both not-for-profit companies said details were still being hammered out.

For Bay State's ...

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