A $54 billion deal is rattling the health world — and it may be Obamacare’s fault

A $54 billion deal is rattling the health world — and it may be Obamacare’s fault

Anthem has bought Cigna for a huge sum, and it means there are only three big health insurance companies left.

In a megadeal that has sent shockwaves through the industry, health insurance giant Anthem has agreed to purchase fellow health insurance giant Cigna in a deal worth $54 billion — a move that worries consumer advocates as it now means there are only three major health insurance providers left in the United States. And it’s a move that may be happening because of Obamacare.

Anthem, the insurer for Blue Cross and Blue Shield, will buy all Cigna shares under the deal, which will close in the latter half of next year if it can win the approval of state regulators, according to a CNN report.

It’s a huge merger: a total of 53 million people would be covered by the new entity, a significant chunk of the entire United States.

It’s the latest merger that has shown a severe consolidation in what is already an industry that many accuse of being a monopoly of sorts, leading to incredibly high costs for health care compared to much of the rest of the world. Another health insurance giant, Aetna, bought Humana for $37 billion earlier this month, and that new entity will cover 33 million members.

That leaves just UnitedHealth as the last other major health insurer, which itself had just recently opened the checkbook for $12.8 billion to pick up Catamaran, a prescription provider.

And then there are the providers of those drugs: pharmacies like CVS and Rite Aid, which made their own acquisitions totaling in the billions this year. And hospital companies have been expanding.

So why all the mergers? Many people are pointing the finger at Obamacare, or the Affordable Care Act. Although more Americans have health coverage under ACA, meaning more customers for these health care companies, it also means that industry profits are being squeezed. And it’s leading to concerns that if this continues, mergers will make insurance companies even more powerful.



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