Health insurance mergers mean big business, but do they mean big changes?

Four of the country’s biggest health insurers (Anthem, Cigna, Humana and Aetna) will become just two if the Anthem-Cigna and Humana-Aetna health insurance mergers pass antitrust approval. Some wonder what this round of health insurance mergers could mean for employees and employers, who sponsor health plans for their workers. The insurers, for their part, believe the health insurance mergers can lead to lower costs for customers. In the company’s second quarter earnings conference call, Aetna CEO Mark T. Bertolini noted that his company believes “there's an opportunity to improve the performance of Humana's Commercial and Medicaid businesses by deploying our strong capabilities in both these areas. The combination will reduce costs, which will enable the combined company to provide more cost-effective products to consumers.”

Anthem CEO Joseph Swedish expressed similar sentiments upon the official announcement of the Anthem-Cigna merger agreement, stating that the combined company “will deliver meaningful value to consumers and shareholders through expanded provider collaboration, enhanced affordability and cost of care management capabilities, and superior innovations that deliver a high quality health care experience for consumers.”

However, there has been some public scrutiny of the health insurance mergers, with Democratic presidential front-runner Hillary Clinton among those weighing in on the issue. In a statement issued by her campaign in October, Clinton expressed “serious concerns about the proposed [health insurance] mergers” and called on the firms to “commit to passing on savings and efficiencies to consumers as lower premiums and out-of-pocket costs.”

The consolidation hasn’t just stopped with health insurance mergers. In October, Walgreens Boots Alliance, Inc., the parent company of Walgreens, announced it would purchase Rite Aid for $17.2 billion in cash. As the Boston Globe notes, Walgreens is the second-biggest pharmacy in the U.S., with Rite Aid third in size.

“This combination will further strengthen our commitment to making quality healthcare accessible to more customers and patients,” Walgreens Boots Alliance CEO Stefano Pessina said in a company-issued statement. “Our complementary retail pharmacy footprints in the U.S. will create an even better network, with more health and wellness solutions available in stores and online. Walgreens Boots Alliance will provide to Rite Aid its global expertise and resources to accelerate the delivery of integrated frontline care, and to offer innovative solutions for providers, payers and other entities in the U.S. healthcare system.”

With so many health care industry developments, it’s important for a company navigating these benefit waters to partner with a company like The Plexus Groupe. As an independent, progressive, privately-owned national insurance brokerage and consulting firm, Plexus can be your advocate during these changing times in health care. For more information, contact The Plexus Groupe today by calling 847.307.6100, or by visiting us at plexusgroupe.com.

References

IrAnthemInc.com. “Anthem Announces Definitive Agreement to Acquire Cigna Corporation.” July 24, 2015.

SeekingAlpha.com, “Aetna (AET) Mark T. Bertolini on Q2 2015 Results – Earnings Call Transcript.” August 4, 2015.

HillaryClinton.com. “Hillary Clinton: ‘Serious Concerns” About Proposed Mega-Mergers of Health Insurance Companies.” October 21, 2015.

WalgreensBootsAlliance.com. “Walgreens Boots Alliances to Acquire Rite Aid for $17.2 Billion in All-Cash Transaction.” October 27, 2015.

Woolhouse, Megan and Fernandes, Deirdre.  "Walgreens-Rite Aid merger would pose challenge to CVS." Boston Globe, October 29, 2015.