3 Predictions in the Wake of Recent Health Plan Mergers

In case you missed it, Aetna and Anthem recently signed deals to merge with health insurance giants Humana and CIGNA, respectively. These mergers have created quite a stir in the insurance market, with many experts left questioning what this will mean for the managed care and commercial market in the years to come.

All things considered, here are Cody’s top three predictions on how these mergers will shake up the market place:

  1. Three or four major health plans may dominate the market

As health plans continue the consolidation trend, the U.S. may end up with only three or four major players dominating the market, and these larger plans may begin to push back on CMS’ regulations.

Even now, many health plans see CMS as hindering them from best serving their members, and with increased clout in the market, they may begin resisting further changes.

  1. Smaller plans may begin to be more focused

With so few plans to choose from, start-up plans that enter the post-merger environment will likely be very niche-oriented and focus on small geographic areas in order to compete with the larger players.

  1. The government may force larger plans to divest their membership

With Anthem and Aetna now holding more than 90% of the market share in many U.S. cities, the Department of Justice may force these large health plans to sell portions of their membership to avoid a monopoly of the market.

This will mean increased membership and more business for smaller, regional health plans.

For more of my thoughts on this topic, check out this Business Insurance article.