Home » NEWS » Health » Health care mergers alter market

Health care mergers alter market


It has been a summer of mergers.

Kicking off the July announcements, insurer Centene Corp. agreed to buy Health Net Inc. for $6 billion in cash and stock.

Then Aetna announced its intention to merge with rival Humana in a $37 billion deal. The resulting new company would have more than 33 million members.

Also in July, Anthem, a Blue Cross and Blue Shield insurer, announced its plan to buy Cigna for $54 billion, creating the largest health insurance company based on number of members. The merger would reduce the major insurers in the U.S. from five to three.

The deals must undergo scrutiny by state and federal regulators to determine possible impact on competition and consumers.

Mississippi Insurance Commissioner Mike Chaney met recently with Aetna and Humana representatives. “Aetna has reassured us that they are committed to staying in Mississippi. Humana had done the same thing the week before so we feel fairly comfortable with the merger,” he said. “I don’t think from what I know you will see a lot of pushback from Justice on the Aetna and Humana merger. It looks like it’s going to work out for them.”

Chaney said the mergers will have little impact if any on Mississippi consumers. “I don’t think it’s reducing competition in my state because Aetna doesn’t have a footprint here anyway,” he said. “As far as Cigna and Anthem, this merger could result in additional competition for Blue Cross and Blue Shield of Mississippi.”

Having enough choices is important to consumers.

Scott Bingham, executive vice president of Ross and Yeager, said in an email response: “At a time when employers are trying to balance a mandate to offer coverage to their employees that meet the ACA’s benefit and affordability requirements along with the strain this line item can have on the budget, it is always desirable to have a healthy number of carriers vying for an employer’s business,” Bingham said. “The same holds true for individuals who are now mandated to have coverage for themselves and their family members and quite often make their insurance choices through what their employer offers.”

In Mississippi, the long-term impact of these mergers may be more positive than in other areas of the country. “Aetna recently has not had a large presence in the employer group medical market in the state, while Humana has held a consistent spot here.  In addition to its group offering, Humana has been an anchor carrier in Mississippi for individual coverage in the Healthcare Marketplace/Exchange, so their presence is constantly expanding,” he said. “Aetna’s overall appetite seems to be directed toward really larger employer groups.  We believe the joining of those two carriers could ultimately strengthen its overall offerings in the state.”

Bingham described Anthem’s acquisition of Cigna as “quite interesting.”

He said, “Though Cigna hasn’t seemed to focus on the overall Mississippi employer group medical market, we are uncertain if this acquisition will invigorate its efforts here. Anthem has acquired several Blue Cross & Blue Shield plans across the country over the years. Blue Cross & Blue Shield plans, though independent of one another, typically do not compete against each other.  The Blue Cross & Blue Shield of Mississippi plan remains a popular and viable medical insurance choice for Mississippians from both an employer group and individual perspective. It will be interesting to see how this dynamic eventually plays out here. “

He thinks the branding of the merged company might have more of an Anthem Cigna identity to it to avoid any potential conflict or confusion.

Bingham said, “Even as choices appear to dwindle, there is an evolution that continues to develop that expands the consumers’ experience beyond just reimbursement of medical expenses.  Carriers, like brokers, should continue to broaden their overall value-based proposition to include a focus on items such as consumer wellness, advocacy and health literacy.”

Chaney isn’t aware of other mergers shaping up but more could take place. “From what I know, these are the ones we are aware of, going from five big companies to three. But it wouldn’t surprise me to see a couple of other mergers.”



… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Lisa Monti