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Could insurer mergers lead to a single-payer system?


Since four of the country's major health insurers announced their plans to pair off, the primary industry reaction has been characterized by scrutiny and skepticism. Meanwhile, it's mainly been the merging insurers, along with America's Health Insurance Plans, that have argued the benefits of the deals.

But Art Caplan, founding director of the Division of Medical Ethics in NYU Langone Medical Center's Department of Population Health, is the rare exception to this rule, writing in an opinion piece for The Health Care Blog that stopping these deals is a "terrible idea."

The merging insurers argue that their deals will have more power to negotiate price with providers and achieve greater efficiencies, thereby lowering costs, he writes. And indeed, this has been the case with Medicare, whose scale already gives it lower administrative costs than its commercial counterparts.

So not only should regulators approve the Aetna-Humana and Anthem-Cigna mergers, they also should allow the companies to continue to consolidate until only major health insurer remains, according to Caplan. Then the federal government should merge this insurer with Medicare and create a single-payer system.

Caplan is not the first to argue for a single-payer system. In the first Republican presidential debate, Donald Trump addressed his past support of the idea, arguing it has worked well in Scotland and Canada. Still, the concept has failed to gain much traction stateside, evidenced in part by a failed attempt at a single-payer system in Vermont. In fact, an all-payer rate setting system may be a more practical strategy, FierceHealthPayer has reported.

But Caplan points out the cost increases for private insurance will continue to outpace Medicare for 30 years, according to Congressional Budget Office estimates. This is evidence, he says, that the free market has failed and a single-payer system is warranted.

To learn more:
- read the opinion piece

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American Medical Association: Insurer mergers would diminish competition
All eyes on how regulators will respond to massive health insurer mergers
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