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Insurers Playing Game of Thrones

There’s been a lot of talk about the potential for mergers between major insurance companies in coming years. Any combination of these would lead to some major changes, be it Aetna, Cigna, United, Humana, etc. The Wall Street Journal outlines this process in full, but it’s a little much to digest all at once.

Let’s summarize what these mergers really mean. As an example, Blue Cross/Blue Shield in North Carolina works with Novant Health, a major system in the state. Aetna, on the other hand, works closely with Carolinas Medical Center healthcare, another major system.

If these two join forces, they are each doubling their coverage and responsible for paying twice as many major providers. The consensus with insurance companies tends to be that the providers shouldn’t receive so much cash from the companies under whose network they fall under.

If the providers continue to demand these prices, they don’t have many options in terms of nabbing another network, and hence their own client base would drop dramatically without major coverage. So, theoretically, prices go down for everyone since they just can’t operate their high-ticket pricing anymore, right? This is a benevolent monopoly!

Wrong.

With these potential mergers, we the consumers have no choice in providers. Much like we’re seeing with cable companies today, people can hate the service they’ve been offered, but there are only two or three choices, all equally huge and difficult to deal with.

This same phenomenon could easily apply to our healthcare with these superpowered collections of insurance companies. They could basically charge us whatever they want, and have as the number of insurance options to choose from in recent years has gone down while costs multiplied. Services will need to be rationed to account for minimal funding, and all levels of the industry suffer.

To sum it up, these massive mergers are bad news. Here’s hoping that antitrust laws cover their bases accordingly.

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