The Summer Merger Frenzy Of The Health Insurance Giants: What Employers Should Keep In Mind

First Humana and Aetna, now Cigna and Anthem – it’s been a hot summer of mergers. The biggest players in the market just got bigger. It’s no doubt that things are heating up and a lot of this pressure to consolidate stems from the Affordable Care Act and preparation for what’s to come.

What does this mean for businesses? Companies are already faced with many challenges when it comes to offering benefits to employees, so the thought of these mergers limiting options and raising costs even more is certainly a concern many employers will have. With all the uncertainty, here are a few thoughts for employers to keep in mind as we continue to navigate through the world of healthcare:

  • It will be business as usual until the mergers are complete. The amount of due diligence involved in a typical M&A transaction can be quite extensive. The fact that these are giant, public health insurance companies, already heavily regulated by the federal government, will increase the amount of due diligence tremendously. It will be at least a year or two before the deals are even finalized.
  • Opportunities for larger networks and more plan choices. While options may be limited around renewal time when shopping for more affordable carriers, the partnerships are supposed to bring expanded in-network coverage with additional plan options to consider. This can be a great win for the companies who continuously experience network limitations.
  • Negotiating Power. The larger the company, the more leverage the insurance companies will have to negotiate with the healthcare providers, which can possibly mean more stabilized premiums. On the flip side, these powerful giants dominating the market can also cause prices to skyrocket even more. Employers should be prepared for both outcomes.
  • If you don’t have a wellness program in place, there’s never been a better time to roll one out. The consolidation of health insurance carriers mean that there will be less carriers to switch back and forth from, so instead of chasing the most affordable carrier year after year, companies are going to really have to strive to encourage good health. This will be the key to controlling costs. Healthy employees are a win-win all around.

Bottom line – it’s very early to draw any solid conclusions from this merger “frenziness” but it’s not a bad idea, as a business owner, to be prepared as much as possible for what’s to come. However, we’re a long way away from seeing any of this come to fruition, so just enjoy the rest of your summer and try to stay cool in that triple degree weather.

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