Aetna and Humana are joining forces. The two insurance companies are amongst the largest in the insurance world already, but joining together makes them essentially the largest and most powerful insurance entity on the planet. The big question that people have right now is – how will this impact me? Well, conventional wisdom would suggest that the quality of insurance received by the average individual would get better. However, that might not actually be the case when all is said and done.
Aetna might have acquired Humana, and they could very well be going through the steps right now to acquire another big name in the insurance space. However, that doesn’t mean that they’re the only company executing these moves. In fact, it has become the norm to make these types of moves throughout the industry. Humana ranked in the top five providers in the United States as it stood anyway, so this move is one that isn’t entirely surprising to some degree.
For these two, it means that Aetna and Humana have joined forces to create a net revenue of a staggering $115 billion. That is an unbelievable amount of money, and it’s important to understand what the scope of this means in the long-term. For consumers, the benefit should be a more competitive and less expensive product. However, that likely will not be the case.
Sometimes when things get this big, especially when those things are massive insurance companies, they start to dominate the industry to a point where smaller companies are left unable to compete at all. When that happens, there becomes a monopoly of the market. Only a few names are competing and prices then get driven up through a process of upselling that is controlled by the few names in the space.
Paul H. Keckley who researchers healthcare systems points out that there are forces at play here that allow these massive companies to continue working and growing, but keeping them in check at the same time. He said, “What people miss is the regional strength of regional Blue Cross plans.” He went on to point out that names like Blue Cross continue to truly dominate the insurance space, and that is a non-profit insurance company. Unlike Humana or Aetna, who are both for-profit companies.
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The experts say though that the change that is coming won’t have a heavy impact on the consumer. While those who are covered under these massive companies might see slight changes in their coverage – big sweeping changes won’t come either. Prices won’t even change that much, either, because much of that is regionally based.
That means what consumers pay in one location now is likely what it will remain – as pricing, competition and everything else associated with insurance is handled regionally instead of nationally – no matter how large those companies are. This is a major win for the consumer, and a huge win for those who are looking to save some money as names like Humana and others connect and become even larger companies.
