The prospect of consolidation poses high stakes for the Obama administration, whose signature domestic policy legacy is the 2010 health-care law. Some aspects of the health law were designed to increase insurance-industry competition, including marketplaces for health coverage and the creation of new nonprofit cooperative health plans around the country.
But the law also includes provisions that may have helped inspire consolidation, at least indirectly. For instance, it requires insurers to spend a certain percentage of premiums on health care, which adds to the pressure to trim administrative costs,—a benefit insurers are likely to seek from merging.
A Wall Street Journal analysis from earlier this month found some combinations of the top health insurers could damp competition in certain markets around the country.
Kendall, Brent, and Mathews, Anna Wilde. "New Gauge for Health-Insurer Deals" The Wall Street Journal., Monday, June 29, 2015, B1, Accessed on June 29, 2015, http://www.wsj.com/articles/doj-girds-for-strict-scrutiny-of-health-insurer-mergers-1435524588
It probably won't provide as much drama as the Greek crisis but this will be a news story worth following over the course of the next few years. The linked study in the final paragraph of this excerpt is worth reading too if you have the time.
No comments:
Post a Comment