The Supreme Court’s recent blessing
of Obamacare has precipitated a rush among the nation’s biggest health insurers
to consolidate into two or three behemoths.
The result will be good for their shareholders
and executives, but bad for the rest of us – who will pay through the nose for the health insurance we need.
We have another choice, but before
I get to it let me give you some background.
A week before Aetna’s announcement, Anthem disclosed its $47 billion offer for giant insurer Cigna. If the deal
goes through, the combined firm will become the largest health insurer in America.
Meanwhile, middle-sized and small insurers are being gobbled up. Centene
just announced a $6.3 billion deal to acquire Health Net. Earlier this year Anthem bought Simply Healthcare Holdings for $800 million.
Executives say these combinations
will make their companies more efficient, allowing them to gain economies of
scale and squeeze waste out of the system.
This is what big companies always
say when they acquire rivals.
Their real purpose is to give the
giant health insurers more bargaining leverage over employees, consumers, state regulators, and healthcare providers (which
have also been consolidating).
The big health insurers have money to make these acquisitions because their Medicare businesses have been
growing and Obamacare is bringing in hundreds of thousands of new customers. They’ve also
been cutting payrolls and squeezing more work out of their employees.
This is also why their stock values have skyrocketed. A few months ago the Standard
Poor’s (SP) 500 Managed
Originally appeared at: http://robertreich.org/post/123327070510