The Aetna-Humana merger has big ramifications for the health care industry. We asked some industry experts about what the merger—and rumors of subsequent dealings in the health care industry—means for brokers, consumers and the industry in general. Here's what they said:
“Too early to tell what it means for consumers. We should expect more of these announcements. It only makes sense, as carriers are forced to spread their costs over a wider base of policyholders. In this case, bigger really is better. It's the only way to meet the regulatory mandates and have any hope of making a profit. As a lifelong voluntary guy, I always see things through that prism. I think these mergers will only prolong the inevitable and rates will continue to climb, no matter what. That means gaps will get bigger and voluntary will remain the best answer. Good news, for sure, if you're in that business.”
—Brian Hicks, Benefits Selling columnist and author of “The Tinderbox Tapes”
“I believe choice is good for consumers.
As our industry contracts, fewer choices is a bad thing. But in this case, considering the big mergers have been predominantly on the fully insured side, I actually see a bright side. PPACA has largely homogenized plans and rates. And MLRs reduce runaway profits of the carriers. However, as we reduce the carriers, we move more closely to a single payer system, which could have the impact of full government-run health care occurring without actual government involvement, and could make it an easier argument for the Feds to do just that.
—David C. Contorno, CEO of Lake Norman Benefits and Benefits Selling's 2015 Broker of the Year
“I can see where the Aetna and Humana deal makes sense and could actually be a good thing for consumers. Their core strengths complement each other, and a bigger, stronger Aetna will compete more effectively with United, Anthem and other major geographically concentrated Blue plans.
Regarding the rumored United and Aetna merger, I can't see that alliance boding well for consumers. And, the same can be said for Anthem and Cigna. We'll wait and see, but it seems clear regulators will emerge as key participants in a post-Obamacare marketplace, and if this type of activity is left unfettered, less competition is a distinct possibility.”
—Mike Sullivan, Executive VP and CMO, Digital Insurance/Digital Benefit Advisors
“The merger, and rumored additional mergers in the insurance industry, has caused me to truly focus on providing value-based services that are outside of the insurance carrier relationship. As we have less carrier choice from consolidation, and more regulated pricing, the key to our industry, our relevance and our value to clients is to provide strategic planning, communications, compliance, technology and wellness consulting services in conjunction with our employer and employee advocacy service model.”
—Kevin Davis, employee benefits consultant at Univest Insurance
“The sudden speed with which these proposed and accepted mergers are occurring is quite surprising. Because things are unfolding so quickly, it's not yet clear whether such mergers could have positive effects such as increasing carrier negotiation power with providers and hence reducing medical costs on which premiums are based, or whether reduced competition could increase the cost of coverage.”
—Don Goldmann, vice president of the Word & Brown General Agency and president of the National Association of Health Underwriters
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