2016 Health Insurer Merger Frenzy 125
coordinated care efforts, they also gained market share and negotiation power along the way, forcing insurers to raise rates that get passed onto consumers.221 While providers argue only anti-competitive effects, the proposed mergers will carry multiple pro-competitive effects. Insurers argue the mergers will increase efficiency.222 Aetna has already publicly claimed it can identify $1.25 billion in “synergy opportunit[ies]”223 and increased operating efficiencies in the Humana acquisition. Both proposed mergers will increase payor scale to negotiate lower reimbursement rates, ultimately saving money for the systems and likely resulting in lower premiums charged to consumers. Furthermore, these mergers will allow the newly merged insurance companies to innovate care delivery.224 UHG, the nation’s largest insurer,225 recently announced a new plan consisting of primary care clinics in Atlanta and Chicago, focused on preventive care, offering unlimited free doctor visits, around-the-clock access, personalized health coaches, and mental health treatment.226 These new models are risky considering UHG’s 2015 losses, but UHG’s size, scope, and resources allow them to take these types of risks and implement innovative care models that will benefit consumers and could ultimately cut care costs dramatically.227 In evaluating these proposed insurance mergers, a significant pro-competitive effect of these mergers will be the ability to craft inventive high-quality, low-cost consumer- focused care models, following the lead of UHG. Despite public scrutiny, both proposed mergers are receiving continuous approval from state regulators.228 This state approval speaks to the idea that health care is inherently local and if state regulators, looking at their market as a whole, do not have concerns, it may signify that the mergers will inevitably go through, likely with appropriate divestitures. Although these
12:00 AM), http://www.bloombergview.com/articles/2015-07-08/the-case-for-bigger-health- insurers. 221. Id. 222. Aetna, supra note 2. 223. Id. 224. Ebers, supra note 107. 225. Nathan Bomey & Jayne O’Donnell, UnitedHealth Warns It May Exit Obamacare Plans, USA TODAY (Nov. 20, 2015, 10: 54 AM), http://www.usatoday.com/story/money/2015/ 11/19/unitedhealth-group-earnings-downgrade-obamacare-affordable-care-act/76040322/. 226. Phil Galewitz, UnitedHealth Tries Boutique-Style Health Plan, KAISER HEALTH NEWS (Apr. 4, 2016), http://khn.org/news/unitedhealth-tries-boutique-style-health-plan/. 227. Id. 228. See Goliya, supra note 9; see Gilchrist, supra note 203 (noting Colorado Department of Insurance’s recent January approval of Aetna-Humana merger). Anthem’s acquisition of Cigna has been approved in Alabama, Tennessee, Nevada and Montana, leaving twenty-two states and the DOJ left to review Anthem’s deal. Bertha Coombs, Insurance Deal Win Over States, Feds Still in Doubt, CNBC (Feb. 16, 2016, 6: 32 PM), http://www.cnbc.com/ 2016/02/16/ insurance-deals-win-over-states-but-feds-still-in-doubt.html.