The Unfortunate Effect of Healthcare Mergers on Consumers

The biggest effect of the Affordable Care Act has been health insurance consolidation on a huge scale. Obamacare limits the amount of profit hospitals and insurers can generate, which ultimately forced them to expand their customer base in order to increase savings. Frequently, the added savings go to shareholders when it should be going towards improving the quality and lowering the cost of care for consumers. The ACA sought to provide health care for the uninsured and help lower health care costs. The unfortunate result however has been more healthcare mergers, which is neglecting many consumers. The impact of the 2007 merger of the UnitedHealth Group and Sierra Health Services in Nevada was recently studied. The results were alarming as it found no consumer benefits and premiums in Nevada markets even increased by 13.7% after the merger.

 

In the last couple of weeks, the nation’s five largest health insurers began merger talks. Most recently Cigna rejected Anthem’s $47 billion bid due to Anthem's recent antitrust allegations and an almost anti-competitive spirit. According to data compiled by Bloomberg, Aetnea CEO Mark Bertolini will leave with $131.3 million in a takeover and Cigna CEO David Cordani would make $58.7 million. This points to a serious flaw that consolidations are only helping health executives and shareholders win. Meanwhile, health care consumers are losing with less plans to choose from and even higher premiums to face due to these big mergers.

 

Written by Alison Killian

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Alison Killian is a recent graduate of Grove City College who majored in Business Management and minored in Biology Studies. She is a contributor to Medical Groups and passionate about all facets of healthcare. She plans on continuing work in the healthcare field especially in management. She is very interested in healthcare innovation and finding ways to improve the current system. She hopes to go back to school in a few years to earn a degree in medicine.