Anthem has just purchased Cigna, a merger of two health insurance giants that means only three large providers are left in the country -- and that could be bad news for consumers.
It’s a megadeal that is causing everyone involved in the health industry to stand up and take notice: Anthem will buy Cigna for $54 billion, and that will reduce the large insurance companies in the United States down to just three. And some think that this is all happening because of the Affordable Care Act, also known as Obamacare.
Anthem is the insurer for Blue Cross and Blue Shield, and they announced that they will purchase all Cigna shares, although the move must still be approved by state regulators and probably won’t happen until the latter half of 2016, according to a CNN report.
The merger would affect a whopping 53 million people who will now be covered by the resulting mega company. And it’s not the only merger that’s happened recently, prompting concerns that a monopoly is developing in an industry that already enjoys extreme profits and drains the economy of hundreds of billions of dollars.
The last big deal happened just earlier this month: Aetna bought Human for $37 billion, affecting 33 million members. That means UnitedHealth is the only other major health insurer other than those two, and that company itself spent $12.8 billion to buy Catamaran, a major prescription provider, earlier this year.
Similar moves are being seen at CVS and Rite Aid which are snapping up properties, and hospital companies continue to expand. So what does this have to do with Obamacare? Experts think that a side effect of more Americans having health coverage under ACA actually means that industry profits are being squeezed as less-profitable individuals join the health care system. That is leading companies to merge in order to protect their bottom lines and operate more efficiently — which may be good for them, but if it keeps up, it may result in even less choice for consumers.
