Key Points about Merger of Health Insurance Majors

Nowadays, merger has become a trend and it has turned into a mania especially in the health insurance world. An announcement was recently made for Anthem and Cigna over a highly-anticipated $54.2 billion deal early Friday morning. Below listed are some point that will guide consumer.

" The earlier 'big five' health insurers are now the 'big three'

As per latest data, Anthem and Cigna will be the biggest insurer with over 53 million members and United Health will be at second with more than 45 million members.

" This is one of the ripple effects of the Affordable Care Act.

As a result of health reform, the five biggest insurers have been eyeing to get even bigger, which has changed the terms of competition between these insurance companies. Due to caps on the profits, health insurers are looking to use economies of scale to become more efficient.

" What effects premiums will have is hard to predict.

The question of how the mergers will affect card-carrying members is more complicated than it might appear. Some earlier conducted studies have shown that fewer insurers in the marketplace will mean higher prices.

Richard Zall, chair of the health care department at Proskauer, a law firm, said, "The premise of the merger for both of these transactions is that they can achieve cost savings and economies of scale, and they of course maintain that will lead to their ability to price even more competitively".

" Regulators will be scrutinizing the deals.

The company said that deals will make them more efficient and benefit consumers, but serious scrutiny from federal and state regulators is highly expected.