Health Insurance Companies Merge After SCOTUS Ruling
Just days after the Supreme Court declared subsidies legal many major health insurance companies declared mergers. Mergers include Aetna (AET) buying Humana (HUM) for $230 a share, 23% higher then market price the day before the announcement.
The new Aetna Humana hybrid will have more than 33 million members, and bring in estimated revenue of about $115 billion per year, with 56% coming from government-sponsored programs such as Medicare.
Other possible mergers include Anthem (ANTX) is interested in buying Cigna (CI), and UnitedHealth (UNH) was even rumored to be interested in Aetna or Humana. That’s on top of a spate of health industry deals and negotiations last year. At one point, Pfizer (PFE) offered over $100 billion for AstraZeneca (AZN), though the talks fell apart. You can read more at CNN money.
Opinions on the Mergers
Above are the facts, two major insurers are merging and some other healthcare industry giants may follow suit. Below is our opinion on what this means.
Our past polls have shown that we have two groups of Americans. One group that wants equal access to healthcare for all Americans, one group that wants a Market driven system.
America is a democracy and sometimes we simply get what we asked for. Not only is health care reform implemented under the Affordable Care Act itself a quasi-public system that is equal parts public healthcare and subsidies and equal parts private markets and shareholders… it now seems the health industries of America (insurers, drug makers, hospitals, device manufacturers) are following suit by consolidating private for-profit companies who make an increasing percentage of their income off of public programs.
The truth is there are many pros and cons here. It’s good for the Market, but could bring us close to monopolies. Many wanted a single payer system, this is closer to that in a way. Health insurance is all about cutting deals with doctors and hospitals, less competition could mean better prices for consumers. Less competition could also mean bigger profits for insurers at the expense of people.
One thing is for sure, the drive to keep stock prices rising and profits up is surely going to be a little tricky here in a world where America continues to acquire healthcare debt at an unsustainable pace and people continue to struggle to afford healthcare without government assistance.
Is it good, is it bad, are we happy, are we sad? It’s probably early to tell. What really matters is the answer to this question: “will insurers jack up rates for 2016 and are the American people getting affordable quality healthcare?”
Author: Thomas DeMichele
Thomas DeMichele is the head writer and founder of ObamaCareFacts.com, FactsOnMedicare.com, and other websites. He has been in the health insurance and healthcare information field since 2012. ObamaCareFacts.com is a...
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Peter Strub
The ACA was to be affordable all while keeping your own doctor, correct? Last year, my wife, who is healthy and on no meds, had her insurance premiums increase by 88% after her insurance company, Aetna, needed to comply and conform to ObamaCare. Prior years, we were experiencing about a 10-15% yearly increase in our premiums. At an 88% increase, we left Aetna and found a company called Common Ground, which was only 45% more, same coverage, same deductible. BTW, they’re dropping the health care insurance this year, because of huge debts incurred. Their premium was still over 30% more than previous history and I’m supposed to feel good about that.(that’s still more than double the increase from previous years) That’s with the same $6000 deductible which applies from dollar one, which means everything is out of pocket until you reach $6000. How does anyone not get this and still call ObamaCare wonderful or affordable? For those who were uninsurable, this insurance came with a tremendous cost from everyone else. Even with those increases, it still isn’t enough. And, to help make things balance better, the coverage for care will be tailored to include less, while costing more. I predict there will be less companies providing health insurance in the near future and those remaining will be tied into specific networks which may well mean that you won’t see your same doctor anymore, unless he or she is listed with that network your insurance company. Nothing was done with the ABA lobbyists, regarding tort reforms or for that matter negotiating with pharmaceuticals, AHA, AMA lobbyists, etc. Pure and simple, ObamaCare has come with more expense and less choices. The ACA was pushed down our throats by the liberals (all party lines) and no one in the political arena will ever reverse it for fear of the media storm and imagery of those adversely affected by it, should it ever be removed or altered.
ObamaCareFacts.comThe Author
Well said. 40 million Americans without coverage is unacceptable, but of course unaffordable costs for millions of others isn’t acceptable either. Healthcare shouldn’t be about politics, it should be about people. Hopefully we get some politicians in office who are brave enough to stand up for the people rather than placating their party and their base.
On that note, altered is most likely the right move. If you look at all of the things the ACA does there is little or no reason to actually try to remove some of them. https://obamacarefacts.com/summary-of-provisions-patient-protection-and-affordable-care-act/