The changes to America’s health care delivery system introduced by the Affordable Care Act are causing some of the nation’s largest health insurance companies to explore merger talks with competitors.

The ACA is likely to lead to “consolidation on a huge scale,” according to Andrew Ross Sorkin of the New York Times.

Anthem, Inc. has made a merger bid for Cigna Corp., Aetna, Inc. is in discussions with Humana Inc., and UnitedHealth Group Inc. has “made overtures” to Cigna, writes Sorkin, a highly respected observer merger, and acquisition activity.

The impetus for the merger discussion is the ACA’s focus on controlling health care costs, which has led to providers seeking ways to operate more efficiently. In many cases, says Sorkin, mergers are intended to reduce costs, and increase profits, through economies of scale.

A physicians group is opposing this trend. “Seldom does consolidation result in reduced costs for consumers. Bigger insurance companies mean increased leverage and unfair power over negotiating rates with hospitals and physicians,” said the American Academy of Family Physicians in a letter asking the Federal Trade Commission to block such mergers.

“More often than not, consolidation increases costs and reduces options for consumers, and we believe this would hold true in the health insurance market,” the group argued.

We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.