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As the health insurance merger world turns: Drama, plot twists and cliffhangers


Now that the King v. Burwell ruling has come and gone, the biggest news these days is inarguably the consolidation fever that's swept the nation's major insurers.

In fact, though, the two issues are inextricably linked. While predictions haven't really panned out that the Affordable Care Act would force insurers that specialize in employer-sponsored health plans to recalibrate, many analysts agree that the decision to uphold a key facet of the ACA provided the stability necessary for deal-hungry insurance companies to make a move.

And move they have. Here are some of the recent developments in the soap opera I've come to call "As the Health Insurance Merger World Turns."

It appeared Anthem and Cigna would be the first to pair up, but then came the plot twist: Anthem apparently got fed up and went public with behind-the-scenes drama over Cigna's refusal to accept its takeover bid

Cigna was none too pleased with the tactic, spurning Anthem's advances with a statement that called its actions "deeply disappointing." For his part, Anthem CEO Joseph Swedish made it clear that he would not back down in his bid to woo Cigna, despite the smaller insurer's concerns about his proposal to take a strong leadership role in a combined company.

Then, out of the shadows stepped Aetna, which rocked the health insurance world with a $37 billion deal to take over Humana. With the deal, which is still pending regulatory approval, Aetna would score the coveted prize of Humana's Medicare Advantage business, a lucrative asset considering the ripe market of aging baby boomers.

For Anthem and Cigna, the Aetna-Humana deal may have brought their cooled-off talks back from the dead. For UnitedHealth, which wouldn't even have to execute a merger to retain its spot as the nation's largest insurer, its role in the current pair-ups isn't quite clear. It could, however, surprise everyone and play the role of spoiler.

And that's not even including the various predictions that consumers and healthcare providers will end up paying the price for health insurer consolidation. Whether that actually comes to pass remains to be seen--after all, none of the nation's major health insurance companies have officially combined yet.

Experts can't agree on whether health insurance consolidation will help, hurt or even affect beneficiaries. Fitch Ratings seems to think that health systems are well-positioned to handle payer mergers, though either way it would be questionable for an industry that is itself so fond of consolidation to criticize the same behavior among insurers. 

As for health insurance companies, all the frenzied deal-making is sure to profoundly alter the industry. For one, it could accelerate much smaller insurers' moves to link up with larger counterparts. It may also give the industry a taste of the federal government's increased appetite for unwinding completed mergers.

In classic cliffhanger style, the merging entities may have to wait months or even years to see their deals finally pass regulatory muster. 

Finally, the first entities to successfully combine will have to navigate the tricky business of settling governance issues--here's looking at you, Cigna and Anthem--consolidating operations, figuring out branding issues and much, much more. 

In short, the implications are far from certain and the drama is only just beginning. As for me, I'll be on the edge of my seat. – Leslie @HealthPayer

Related Articles:
Anthem, Cigna make progress toward merger deal
Cigna, Anthem trade barbs over 'deeply disappointing' takeover bid
Anthem won't back down on bid to take over Cigna
Aetna acquires Humana for $37B
Merger madness: What takeover bids mean for the health insurance industry
However health insurance deals shake out, UnitedHealth likely to come out on top
Deconstructing health insurance merger fever: 3 major issues