Most states approve of the merger of the four of the nation’s largest health insurers. The PIA Western Alliance state of California will not be one of them, but many others don’t oppose the idea.
Florida is the 10th state to say yes to Aetna’s $34 billion purchase of Humana. Also on the line and getting state attention is an Anthem and Cigna’s $54 billion merger.
The Florida decision means Aetna now has enough state approvals to move forward with the purchase except … the Department of Justice still has its say and the DOJ — says Aetna CEO Marc Bertolini — isn’t moving all that fast. “The DOJ conversations are not even yet started on the divestiture front. We’re still sharing data and working on the framework of the discussions.”
Two PIA Western Alliance states — Nevada and Montana — have approved the Anthem-Cigna merger and another 22 are looking at the deal. Cigna’s CFO Thomas McCarthy said “we’ve got a long way to go.”
Doctors groups and consumer groups have expressed concern and claim the lack of competition will drive up rates and lower the kind of care available to consumers. American College of Physicians senior vice president Robert Doherty explained the health care provider perspective.
“They [health care providers] typically will not have the leverage to be able to say no to an insurance contract, when that insurer may control 50% to 60% of the patients they see,” he said.
The insurers say things will be more efficient and will be better — not worse — for consumers. But will they really? The Congressional Budget Office recently did a prediction of what health insurance premiums will look like in 2025. They’ll be up about 60% over where they are now.
And to put it into terms you can really understand:
• $10,000 a year for singles
• $24,500 a year for families
Breaking it down even more:
• The increase is in line with what we’re experiencing now.
• Rates are rising — and will continue to rise — about 2% higher than wages.
• ACA plans via the marketplaces will go up 8% annually until 2018.
• From 2018 to 2025 the rate hikes will drop to 5% to 6%.
That leads to the average annual premium for consumers in 2025:
• $5,000 for a single 21-year old.
• $7,500 for a single 46-year old.
• $18,200 for a family.
Source links: Two from Insurance Business America, link 1 and link 2