Federal antitrust regulators seem to be dominating the health insurance industry headlines this summer.
Health market watchers are looking to see whether the antitrust regulators will let Indianapolis-based Anthem acquire Bloomfield, Connecticut-based Cigna Corp.
Regulators are also mulling the effort by Hartford-based Aetna to acquire Louisville, Kentucky-based Humana. Many publications have carried stories in the past week, based on remarks from "sources," that at least two insurers have made offers for Aetna Medicare plan assets, to resolve concerns that an Aetna-Humana deal would create a company with too big of a share of some states' Medicare plan markets.
Other major health care-related acquisition proposals have fallen through in the past. Humana, for example, broke off a deal with Minnetonka, Minnesota-based UnitedHealth Group in 1998. The Anthem-Cigna deal, the Aetna-Humana deal, or both deals could fall through this time around. But the general business and Affordable Care Act forces that drove the insurers to announce the deals could continue to promote market consolidation, no matter what happens to specific deals.
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Here are some speculative views about how further health insurer consolidation could shape the insurance industry's role in future efforts to reform the U.S. health care delivery and health care finance systems:
Federal health insurance exchange managers have given little attention to health insurance features other than price. (Image: Thinkstock)
1. Insurers may go with the flow and focus even more tightly on lowering premiums, and nothing but lowering premiums.
Regulators at the Centers for Medicare & Medicaid Services (CMS), the arm of the U.S. Department of Health and Human Services that implements Affordable Care Act provisions that affect the commercial health insurance market, are now working on efforts to give ACA exchange plan enrollees more information about plan networks. They are also working on a quality rating program.
But exchange program managers initially focused mostly on helping consumers hold down premiums. Andy Slavitt, the acting CMS administrator, recently told insurance company representatives that he believes consumers are interested mainly in the cost of coverage.
Typical analyses of health insurer consolidation effects focus on the impact on premiums, not provider networks or service quality, and ongoing consolidation pressure could increase insurers to focus more on the matters that seem to get the most attention from antitrust regulators.
That could reduce the likelihood that insurers will uncover problems and unmet needs by experimenting with efforts to improve plan quality.
Producers can bring insurers customers, and a unique perspective on what customers are saying. (Photo: Thinkstock)
2. Because insurers have less (or think they have less) need to use agents, brokers and consultants to make sales, they may listen to producers and consultants less.
Major medical issuers have announced series of individual health commission cuts in recent years, and their presence at agent meetings seems to be shrinking. Issuers may get more information about consumers from analyses of online transactions, but less from producers who talk to consumers, employers and providers face to face every day.
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When Assurant gave up its health insurance unit, the health care system lost Assurant executives' quarterly comments about the system. (Photo: Thinkstock)
3. Insurers may be less inclined to be candid about what's going on in the market.
In 2015, when New York City-based Assurant was a major player in the Affordable Care Act exchange system, it was one of the first and only publicly traded insurers with executives who talked candidly during quarterly earnings calls with securities analysts about their views of ACA commercial health insurance rules and the ACA exchange system.
When Assurant shut down its health insurance unit, market watchers lost a source of information about the effects of the ACA.
If consolidation continues, and the remaining health insurers get more of their business from government health programs, such as Medicare and Medicaid, that could further limit the remaining insurers' ability to talk freely about concerns about government rules and programs.
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Several large insurers have left America's Health Insurance Plans in recent years. (Photo: Thinkstock)
4. Insurers may give their trade groups fewer resources those trade groups can use to be candid.
Aetna and UnitedHealth Group are two large insurers that have left America's Health Insurance Plans, a major health insurer trade group, since mid-2015.
If future insurer consolidation reduces the number of insurers willing and able to pay AHIP dues, that could hurt AHIP's ability to represent insurers' interests in Washington, and to translate the views of insurance industry actuaries and claim managers about how health insurance really works into language that lawmakers, congressional aides and regulatory agency officials can understand.
In a market with fewer insurers, policymakers might get a narrower range of advice from insurers. (Photo: Thinkstock)
5. The diversity of insurer views might decrease.
Today, health insurers tend to express a wide range of views on issues such as how states should regulate health insurance premiums, or the proper role of health savings accounts. Further industry consolidation could narrow that range.
Congressional committees have had trouble getting basic information about ACA programs. (Photo: Allison Bell/LHP)
6. Regulatory agencies may feel even less need to disclose what they're doing.
Members of Congress are complaining now about problems with getting basic information about Affordable Care Act operations, such as public information about the number of people in small-employer exchange plans, from federal agencies.
Recently, insurers may have triggered the release of some ACA program information by suing the federal government over concerns about an ACA insurer risk management program, the risk corridors program.
A drop in the number of health insurers with an interest in the release of regulatory program information could weaken industry demands for the release of that kind of information.
A New Mexico lawmaker revealed through questioning Wednesday that a key Obama administration health policy official did not understand what has been happening to the supply of health coverage in Albuquerque. (Photo: Thinkstock)
7. A lack of interest in communication today could lead to market gaps tomorrow.
Policymakers in Washington may think they have the information to make the health care system run smoothly, but, in the past, congressional watchdog agencies have found that communication problems even within federal departments have contributed to problems with launching HealthCare.gov, the Affordable Care Act exchange enrollment system for states that are unable or unwilling to set up their own enrollment systems.
Rep. Michelle Lujan Grisham, D-New Mexico, showed Wednesday at a House hearing in Washington, when she questioned Kevin Counihan, the head of the HealthCare.gov program, that he did not fully understand how claim cost problems are reducing competition in the individual health insurance market in Albuquerque.
Any insurer consolidation trends or other trends that affect consumers', employers', producers, insurers' and officials' efforts to talk about current problems with the market could let smaller headaches turn into bigger headaches.
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