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July 08, 2015 at 12:54 PM
Late last week, it was announced that Aetna Inc. agreed to buy Humana Inc. for $37 billion in cash and stock to broaden its health care coverage.
Read: Aetna-Humana adds to takeover frenzy among carriers
The news has big ramifications. LifeHealthPro’s sister site BenefitsPro asked some industry experts about what the merger — and rumors of subsequent dealings in the health care industry — means for brokers, consumers and the industry in general. Here’s what they said.
1. May help consumers.
I can see where the Aetna and Humana deal makes sense and could actually be a good thing for consumers. Their core strengths complement each other, and a bigger, stronger Aetna will compete more effectively with United, Anthem and other major geographically concentrated Blue plans.
Regarding the rumored United and Aetna merger, I can’t see that alliance boding well for consumers. And, the same can be said for Anthem and Cigna. We’ll wait and see what’s in store relative to consolidation, but it seems clear regulators will emerge as key participants in a post-Obamacare marketplace. Also increasingly clear is that if this type of activity is left unfettered, less competition is a distinct possibility.
—Mike Sullivan, Executive VP and CMO, Digital Insurance/Digital Benefit Advisors
Image: AP Photo/Michael Conroy, File
2. Good news for voluntary market.
“Too early to tell what it means for consumers. As Anthem and Cigna start talking again, we should expect more of these announcements. It only makes sense, as carriers are forced to spread their costs over a wider base of policyholders. In this case, bigger really is better. It’s the only way to meet the regulatory mandates and have any hope of making a profit.
As a lifelong voluntary guy, I always see things through that prism. I think these mergers will only prolong the inevitable and rates will continue to climb, no matter what. That means gaps will get bigger and voluntary will remain the best answer. Good news, for sure, if you’re in that business.”
—Brian Hicks, Benefits Selling columnist and author of “The Tinderbox Tapes”
