With recent announcements concerning the mergers of Humana by Aetna and Cigna by Anthem, there have been concerns about how these mergers could create fewer options in the health care market, which would put more of a financial burden on the consumer as options dwindle.
Scholars and health care experts have also been watching these mergers with concern.
“Economists generally view mergers as reducing competition, and this both raises prices and reduces choices in markets where this happens,” Dr. Timothy McBride told Patient Daily. “How this affects the price of medicine is indirect, since insurers negotiate prices with doctors and others. However, if insurers have more market power, then we think what happens is that providers have less market power and see their incomes and profits reduced.”
McBride is a professor at the George Warren Brown School of Social Work at Washington University in St. Louis. He said he has not heard whether these mergers would face regulatory obstacles due to the Affordable Health Care Act (ACA).
“In general, the government has asked a lot of questions about mergers in the past but usually not disallowed them," McBride said. "The federal government has more power in the negotiations over prices and premiums under the ACA in the annual negotiations and may use that time frame to push on the insurers."
When asked if federal regulations are currently impacting the price of medicine, McBride said the U.S. health market is unique and the answer depends on how one looks at the health care market.
“Most of the regulations of our health markets come through the public programs -- Medicare and Medicaid -- and those programs are growing very fast, of course," McBride said. "Medicare is growing because of the aging of the baby boom, and Medicaid because of the expansions under the ACA.”
McBride said that the ACA probably offers the biggest expansion of regulations in the history of health care and that “most of the regulations of the prices of medicine occur through prices set by Medicare or at the state level through Medicaid.”
