The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers

A new wave of insurance mega-mergers is fueling fears that ObamaCare is crushing competition. Despite initial claims that the law would bring down costs, Republican critics and others say it’s driving the industry to consolidate — which could end up costing consumers more.

Bleeding cash, the Louisiana Department of Insurance (LDI) announced Friday that Louisiana’s Obamacare health insurance co-op will be closing its doors by the end of 2015.

It will be the second collapse of an Obamacare health care co-op this year and the third since the Obama administration rolled them out in 2012 as a competitor to commercial health insurance companies.

The Patient Protection and Affordable Care Act (ACA) included new eligibility and enrollment requirements, which have presented states with significant implementation opportunities and challenges. Although states had choices about whether to host a health insurance exchange or expand Medicaid, the ACA required all states to make major changes to Medicaid eligibility policy, including adding mandatory coverage of new groups, implementing streamlined eligibility and renewal processes, incorporating new eligibility and verification requirements, and coordinating enrollment systems with exchanges.

News that Anthem will buy Cigna for $54 billion– a deal that closely follows the proposed merger of Aetna and Humana — will intensify regulators’ focus on antitrust issues in the health insurance industry.
Because Anthem’s proposed acquisition of Cigna creates the nation’s largest health insurer with 53 million customers, it’s already being met with a healthy dose of criticism from doctors and hospitals who say insurers are already squeezing them.

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.

Health insurance mergers have hit the headlines recently. Aetna and Humana led off by announcing their merger, followed by the agreement by Cigna to be purchased by Anthem. To some, the most notable outcome of these mergers is that they yield two very large insurers, and leave the U.S. with three large health insurers with annual revenues in the $150 billion range. In this populist, “big is bad” era there are already calls for the Justice Department to step in and prevent the mergers. Let’s think this through step by step.

With millions of people getting health insurance coverage since 2010, health insurers can buy one another faster than they can sign up new customers.

The Affordable Care Act created a new kind of “cooperative” health insurance arrangement heralded by supporters of health reform. The co-ops were founded on the idealistic belief that community members could band together to create health insurance companies that would be member-driven, service-oriented, and would not have to answer to shareholders or turn a profit.

The Louisiana Department of Insurance announced today that the Louisiana Health Cooperative, Inc. (Co-Op), a health insurer formed under the provisions of the Affordable Care Act (ACA) as a non-profit health insurance company, will be winding down its operations at the end of 2015. The Co-Op will not offer coverage in 2016 but will continue to honor all in-force policies for the approximately 17,000 individuals that currently receive health insurance coverage from the Co-Op. Most of the Co-Op members enrolled in coverage through the health insurance exchange operated by the federal government under the ACA.

Anthem Inc. has agreed to acquire rival Cigna Corp. for $54 billion, creating the health insurance industry’s biggest company by enrollment.

The agreement announced Friday caps weeks of frenzied deal making in the healthcare sector.