There's a Silver Lining To Those Health Insurance Mergers You Keep Hearing About

Admit it. When you heard that national health insurance behemoth Aetna proposed buying buy Humana, you ignored it. Then, when Anthem announced plans to spend $54 billion to purchase Cigna, you also ignored it.

But should you be worried? After all, consolidation has been known to drive up prices.

JB Silvers teaches health care economics at Case Western Reserve University. He also happens to be a former insurance executive and sits on the board of a local hospital.

"It's a little different for insurance companies because they're middle men, " Silvers says. "They pass on what they can buy with a mark-up."
Silvers says neither merger would have a huge impact in Northeast Ohio, because, combined there aren't a lot of people covered by them here.

But, he says, the deals might make the insurers big enough to negotiate a bit slightly better prices for their enrollees.

"The other angle here is if you've got more market power as an insurance company you are usually able to negotiate better prices from the providers, the hospitals and docs and then that gets passed on. So it could be a good thing," Silvers says.

Both deals need federal approval.

Story by Sarah Jane Tribble


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