Recent health insurance mergers have been making headlines, particularly the recent Anthem-Cigna merger. The Affordable Care Act is the primary driver for the recent insurance mergers, according to Healthcare Dive.
Here are six things to know:
1. The ACA does bring insurers more revenue by way of additional customers, yet greater price transparency and government funding cuts place a great deal of pressure of their profit margins.
2. Many insurance companies are increasing their scales to cut administrative costs because the ADA has reduced the amount of profits that plans can make.
3. Larger companies enable insures to make more efficient technology investments and eliminate duplicate departments. Larger companies also give insures more negotiating power with hospitals and physicians.
4. Recent mergers such as Anthem-Cigna and Aetna-Humana are still subject to regulatory approval. It is not determined whether the companies will be able to move forward.
5. Many analysts speculate whether the merger allow for enough competition so that prices do not increase.
6. Other analysts claim ACA restrictions will forbid insures from raising prices as they see fit. The Department of Justice and the Federal Trade Commission are expected by many to scrutinize the deals to ensure prices do not rapidly increase.
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