Health Insurer Merger Frenzy: How the Continued Arms Race Will Disrupt Traditional Market Roles
Erin E. Dine and MaryKathryn Hurd*
Health care is an inherently irrational market. Unlike any other consumer market, the demand for health care is irregular and unpredictable. Illness knows no economic boundaries. Individuals do not receive advance notice as to when illness will arrive, evidence of health care’s spontaneity’s dismantling effect. Illness creates an immediacy for action that is unparalleled to any other market. With illness, our physical and mental abilities, our livelihoods, and our lifestyles are at risk and that risk exists for all. Due to health’s unpredictable nature, but ubiquitous societal need, health care insurers are continuously challenged to craft successful markets around such volatility. The Affordable Care Act (ACA), 1 market pressures, and growing provider consolidation have created the opportunity for proposed mega-health insurance mergers between Aetna and Humana and Anthem and Cigna. 2 While antitrust laws will evaluate these proposed mergers, whether the agencies enforcing these laws will ultimately prevent this potential competitive oligopoly remains unknown. If the proposed mergers pass antitrust regulators’ approval process, these transactions would produce three mega-insurance companies dominating the health insurance market, forcing health systems to keep the reimbursement arms race even by consolidating. In their current roles, insurance companies pressure providers to keep costs
Erin E. Dine is a J.D. Candidate, Loyola University Chicago School of Law, 2017, Beazley Institute for Health Law and Policy Fellow. MaryKathryn Hurd is a J.D. Candidate, Loyola University Chicago School of Law, 2017, Beazley Institute for Health Law and Policy Fellow. 1. Patient Protection and Affordable Care Act, 42 U.S.C. § 18001 (2010). 2. Aetna to Acquire Humana for $37 Billion, Combined Entity to Drive Consumer- Focused, High-Value Healthcare, AETNA (July 3, 2015), https://news.aetna.com/news- releases/aetna-to-acquire-humana-for-37-billion-combined-entity-to-drive-consumer- focused-high-value-health-care/; Anthem Announces Definitive Agreement to Acquire Cigna Corporation, ANTHEM, INC. (July 24, 2015), http://ir.antheminc.com/phoenix.zhtml?c=1301 04&p=irol-newsArticle&ID=2070832.