Paul Ginsburg testified on capital hill about the proposed mergers within the insurance industry, and the impact of those mergers on consumers. In his remarks, Ginsburg noted that health insurance mega-mergers such as those sought by Aetna and Anthem are extremely complex, difficult to analyze and could cost consumers.
Explaining why the health insurance market is so complex, he said insurers sell to different market segments including individuals, Medicare beneficiaries and national corporations — in many distinct geographic areas. Furthermore, the companies act as intermediaries, buying from health providers and selling insurance to consumers.
Ginsburg acknowledges potential upsides. “For one, Wall Street analysts believe that these mergers will lead to substantial reductions in administrative costs,” he said. But will consumers see those savings in their premiums?
“We may believe that a merger will lower prices paid to providers, but we then need to analyze whether fees will be passed on to those buying insurance,” he said.