Kaiser Permanente, the California-based health care and insurance provider, says it will acquire Seattle's Group Health Cooperative.
The proposed deal announced Friday would add about 590,000 members to Kaiser, which already serves about 10 million people across the country.
Officials said no immediate changes are planned in coverage and care for current members. The transaction is subject to approval by Group Health's voting membership and by regulators.
Washington Insurance Commissioner Mike Kreidler said he would scrutinize the deal "very closely."
He told The Seattle Times he was concerned about protecting consumers in Washington state.
"My job is to ensure that the proposal benefits policyholders at Group Health and all consumers buying health insurance in Washington," Kreidler said. "I want to ensure that we maintain the healthy competition and wide selection of plans we currently have in our state."
Scott Armstrong, Group Health president and chief executive, said the deal between the two nonprofits would allow both organizations to adapt to the changing health care landscape.
"This is an opportunity to do more, better," Armstrong said.
He said in exchange for Group Health, which has annual revenue of $3.5 billion, Kaiser Permanente is contributing $1.8 billion to set up a new Group Health Community Foundation.
And Kaiser plans to invest an estimated $1 billion during the next decade in new facilities, staff, technology and research in Washington state, said Bernard J. Tyson, chairman and chief executive of the Kaiser Foundation Health Plan and Hospitals.
Armstrong said it could take up to a year to finalize the deal.
The Oakland, California-based Kaiser Permanente has $60 billion in annual revenue and operates in seven regions, including Colorado, Georgia, Hawaii, the mid-Atlantic states, Northern California, Southern California and the Northwest, including Oregon and parts of southwest Washington.