Unbiased Analysis of Today's Healthcare Issues

ACA leading to health insurance consolidation?

Written By: Jason Shafrin - Jun• 22•15

That is what Bloomberg is reporting:

Insurance companies are looking at mergers to cut costs and keep profits expanding as a surge in enrollment from the the Patient Protection and Affordable Care Act. Humana, which is exploring a sale after being approached by Cigna about a potential deal, Bloomberg News reported last month,

Analysts have been working to figure out how a potential deal frenzy will shake out. If Anthem targets Cigna, Aetna is likely to pursue Humana, Chris Rigg, an analyst at Susquehanna Financial Group, said in a research note.

“Alternatively, if Cigna really doesn’t want to sell, than the obvious defense is to buy Humana at any cost,” he said. “Crazy times.”

Industry consolidation may create some efficiencies, but also could result in an oligopolies in many markets with consumers having few insurance options, particularly in the highly regulated ACA health insurance exchange marketplaces.

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