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.
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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.