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Are Health Insurance Company Mergers Good Or Bad?


Image: TheTruthAbout… under CC 3.0

Corporate mergers are a fact of life. In recent years, more of them have occurred in the health insurance industry. The healthcare reform law may end up forcing more of them to merge or go out of business.

How do these mergers affect consumers? On the positive side, they allow firms to band together and negotiate lower rates from providers due to their combined policyholder base. However, they decrease the amount of competition and the choices of affordable health insurance available.

The latter is especially dangerous when the major health insurance plan providers in a state merge, leaving residents with few options. Antitrust law could be used to challenge the mergers, but it rarely has been. There are ups and downs, besides.

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