Mergers & Acquisitions

Posted by Phil Dougherty
July 30, 2015

Last month the Supreme Court ruled the ACA law (Obamacare) did not misstep in providing subsidies to residents of states with no state-run exchange (see June 29 blog entry, “Supreme Court decides to keep ACA subsidy”). A defeat could have led to a dismantling of the law.

Insurance carriers wasted little time in committing themselves to the future of Obamacare. So far the following mergers have been announced, which will eventually affect the California health insurance market:

  • Anthem Blue Cross buys Cigna, making it the largest health insurer in the country.
  • Aetna buys its rival Humana.
  • St. Louis-based Centene Corp. buys Los Angeles-based Health Net.


It is unclear at this time how this consolidation will impact the health insurance market next year.  These mergers may face regulatory resistance and, if approved, may take all of next year or more before changes occur.

Based on these consolidations, it’s clear that carriers believe size will matter for their future survival.  We may see a finite number of carriers monopolizing the three health insurance market segments: Health Insurance Exchanges, Medicaid and Medicare, which can’t bode well for the consumer; typically less choice results in higher costs.

Reminder: Just three months until the Annual Open enrollment starts (November 1).  We’ll let you know more about carriers and rates just as soon as we learn.

Phil Dougherty