The architects of the Affordable Care Act counted on competition in the health insurance market to keep costs down and quality high. While the law has accomplished many of its coverage and cost-containment goals, its vision of a more competitive insurance market seems to be fading.
The nation’s second-largest health insurer, Anthem, is poised to acquire Cigna, the fourth- largest. Aetna, the third-largest insurer, is seeking to acquire Humana, the fifth-largest. If approved by the Justice Department, these mergers would produce companies controlling about 35 percent of the health insurance market. These mergers would likely leave that market with far fewer competitors — a disappointing result for those who hoped it would increase “choice and competition.” Yet our research suggests that this apparent failure obscures a potential path to success, one that lies between competition and a fully regulated market.
Read Full Article »