The health insurance "Big 5" may become a "Big 3." Why is this happening? What are the implications for patients and physical therapy?
While mergers and acquisitions long have been part of the health care landscape, in recent months the industry has experienced an unprecedented buying spree in the large insurer market. Simultaneously, there have been numerous purchases and mergers in the pharmaceutical segment. To better ensure provider viability in the face of payment cuts and declining negotiating power, provider consolidation also is on the rise.
Physical therapists (PTs) physical therapist assistants (PTAs), other health care providers, and patients all are wondering how these trends will affect the practice of, and access to, health care services. Health care and economic experts are speculating about the potential effects of these mergers, but the true impact likely will not be known for years. In the meantime, it is imperative that PTs stay abreast of these changes, given our obligation to patients and the profession to ensure that medically necessary physical therapist services remain available--particularly to the most vulnerable patient populations.
As large insurers merge, patient benefits, provider networks, and payment rates are likely to change. We must be prepared to air our concerns, in concert with the voices of other affected stakeholders.
Just since July, 3 major health insurers have announced planned mergers. First, Centene, a Missouri-based Medicaid managed care market leader with 2.9 million members in 21 states, announced it was acquiring California-based Health Net, which offers health maintenance, preferred provider, and point of service products--primarily in the individual and group markets--to a total of 5.9 million members spanning all 50 states.
Next, Aetna, with 22 million members spread across the employer, Medicare, and Medicaid market segments, announced the purchase of Humana, a Kentucky-based insurer that is concentrated in the Medicare Advantage market and counts 13 million members.
Those 2 buyouts soon were followed by Anthem's announcement that it was purchasing Cigna. Anthem, based in California, has 39 million members in 14 states and operates primarily in the self-insured, group, and Medicaid markets. Connecticut-based Cigna has 15 million members in the United States and abroad, operating primarily in the self-insured employer market segment. The combined company would have about 53 million members, surpassing current leader UnitedHealth Group's 45.86 million as of June 30. Upon conclusion of the proposed Cigna purchase, Anthem would have 1.1 million Medicare Advantage members, which would make it the fifth-largest insurer in that segment.
These payers are interested not only in increasing in size but also in expanding into new market segments. Insurers are seeking partners that offer either complementary or new-segment penetration. With the aging baby boomer population, Medicare Advantage is an area of intense interest. The Aetna-Humana merger, if approved by regulators, would result in coverage of 4.5 million Medicare Advantage members. That would...