Health Insurance Mergers May Harm Consumer Interests
The major reason for the huge opposition to the health insurance mergers delves into the fact that it would cut down on competition within the insurance market.
By - What does the future hold for the Cigna-Anthem and Aetna-Humana health insurance mergers? Currently, many experts point at the possibility that these health insurance mergers will face regulatory blockage and won’t continue.
A large number of healthcare organizations have come out against these consolidations and have sent statements to the Department of Justice clarifying their reasons to take a stand and oppose the health insurance mergers.
Both the American Hospital Association and the American Medical Association have spoken out against the mergers while a number of senators have recently sent a letter to the Department of Justice outlining their reasons for opposing the acquisitions.
The major reasons for the huge opposition to the health insurance mergers delves into the fact that it would cut down on competition within the insurance market significantly as well as its potential negative effect on consumer needs. The Hill publication recently outlined how consolidation often leads to higher prices and poorer quality of services or products, which will essentially put consumers at the end of the line.
History shows that the health insurance industry is likely to see that take place if these mergers are to go through since, between 1998 and 2006, consolidations have brought a 6 percent rise in prices within the health insurance market. This means that consumers are likely to experience an increase in premium costs and out-of-pocket spending if the four health insurance companies are given the opportunity to merge.
“A decrease in competition within the health insurance industry would harm consumers by leading to higher premiums and overall costs, less consumer choice, and possible reduced quality of care,” David Balto, Attorney at the Law Offices of David Balto, told HealthPayerIntelligence.com in an interview. “Competition in health insurance markets spurs companies to offer lower prices, improved products and benefits, and innovation, and these mergers will eliminate vast swaths of competition.”
“The Anthem-Cigna and Aetna-Humana mergers would cause health insurance rates to go up, and consumers would pay substantially more in premiums and deductibles. Past studies show that when insurers merge, there's almost always an increase in premiums,” Balto continued.
It is likely that the integration of these major payers will lead its staff to focus its energies on processing the consolidation and take away any focus on customer service, The Hill reports.
While the payers continue to stress that the health insurance mergers will lead them to pass on any savings to consumers, it is expected that these insurers are more focused on recouping any money lost on selling health plans on the insurance exchanges to those with pre-existing conditions and more significant health concerns due to the Affordable Care Act’s provisions. It’s not likely these payers will look to pass on savings to consumers, according to The Hill’s opinion piece.
Additionally, these health insurance mergers may actually lead to a reduction in innovation with fewer products and new health plan benefits hitting the market. The future of the health insurance industry may need to bring more focus to assisting consumers instead of consolidating and creating more strategies to increase profit.
By bringing more focus on ensuring consumers are satisfied and engaged with their health plan options, health payers are likely to see their organizations flourish.
“The biggest risks that could occur are that the companies combine and use their newfound market power to raise prices, cut corners on healthcare, and just focus on making greater profits. In that case, millions of consumers would have to pay more and be worse off. These mergers could undo a lot of the progress resulting from the Affordable Care Act, which depends on robust competition in health insurance markets,” Balto concluded in his interview.
Dig Deeper:
Major Health Insurance Mergers May Leave Consumers “Worse Off”
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