Following the recent Aetna/Humana merger, Anthem has announced an agreement to purchase Cigna, effectively turning the big five US health insurance companies into the big three. Anthem recently finalized negotiations to acquire Cigna for roughly $50 billion, surpassing Aetna’s $37 billion price tag to acquire Humana. Given the potential impact on the health insurance market, both of these deals require antitrust approval from federal regulators. Healthcare providers groups and other industry experts have expressed concern that this consolidation will decrease competition in the market, giving insurers increased clout in negotiating reimbursement rates with doctors and hospitals. Insurers meanwhile point to caps on the profits under the Affordable Care Act as a driving force behind consolidation.
If the Cigna/Anthem and Humana/Aetna deals are both approved by antitrust regulators, the nation’s largest three insurers would cover nearly 150 million people, with Cigna/Anthem covering 53 million, Humana/Aetna covering 33 million, and UnitedHealthcare covering 45 million. (See here for more details.)
Impact on NextGen Healthcare clients: Depending on the current footprint of each of these payers in different markets, these mergers could sharply reduce insurance market competition in certain markets, which could in turn create new contracting and purchasing power issues for your practice.