Sarah Kliff writes Will massive mergers make health insurance as bad as cable?
"Anthem struck a deal Friday to acquire Cigna, creating the country's largest health insurance plan. And less than a month ago Aetna announced plans to acquire Humana. If the Department of Justice approves the mergers, the big five health insurers in the United States would shrink to just three. Taken together, these three companies will cover around 132 million Americans — about half the population under 65.
Researchers have studied historical insurance mergers and have learned that two things happen when health plans consolidate. First, medical prices go down: Bigger insurers have more clout to ask for steeper discounts from health-care prices.
Second, premiums go up: Insurers don't pass along their new discounts to consumers, but instead pocket the savings as profit."
Great. Well actually, maybe not so bad: "The big question for health economists is whether a new Obamacare regulation, aimed at limiting health insurers' profits, could change all that."