Good Health and Three Downsides to Commercial Health Insurer Consolidation. Elvonda

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Title : Good Health and Three Downsides to Commercial Health Insurer Consolidation. Elvonda
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Good Health and Three Downsides to Commercial Health Insurer Consolidation. Elvonda

Writing in The Wall Street Journal, Scott Gottlieb argues that the Aetna-Humana and the Anthem-Cigna combinations are evidence of waning insurer competition that is the direct result of Obamacare.  Not only are ACOs not a panacea, but the Affordable Care Act's insurance mandate to limit administrative costs is forcing Aetna et al to spread their costs over a larger base.  Dr. Gottlieb fears that the oligopolies won't be able to deliver on innovation and will limit consumer choice   

Too bad The WSJ didn't give him more print space.  If they did, Dr. Gottlieb may have also pointed to three other potential downsides to commercial insurer consolidation:

1) The concentration of risk: While having a small regional health insurer go bust is a big problem for hundreds of thousands of insurance enrollees, having a for-profit national insurer with tens of millions of enrollees go bust would be a national catastrophe. Think Lehman Brothers, Black Swans and Too Big To Fail.

2) Cronyism: Politicians and C-Suite executives no longer blush at the prevalence of the revolving door between government and all industry.  Health insurance will likewise be too regulated and complicated to leave to anyone other than insiders, who will naturally be unable to discern the line that separates their interests from the patients'.
 
3) Political Power: Will Washington DC and 50 states really be able to stand up to a handful of companies that dominate a fifth of the national economy?  Years ago, the commercial insurers remained silent while they were called "Fat Cats." The Population Health Blog bets that the next time a While House blames the insurers for rising costs, they won't remain so deferential.

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