How the Blocking of the Aetna and Humana Merger Affects Your Group Insurance Plan

The federal government announced a few days ago that it decided to act against Aetna trying to acquire rival insurance carrier Humana.  This news comes only weeks after the government also blocked a merger between Anthem and Cigna.  Aetna is now threatening to decrease its presence in the Affordable Care Act (ACA) exchange to no more than 10 states.

  Before this announcement, Aetna’s CEO had stated they were going to expand to at least 20 states.  So what changes will be coming to your group insurance plan?

Actually, the short answer is none.  The long answer is a little more complicated. First, let’s discuss what the exchange really is and why everyone is leaving it.  When you hear people speak of the ACA exchange almost every time it is referring to individual plans or where individuals can go to buy policies.  Insurance carriers are starting to leave the individual marketplace for one reason, and that is cost.  Because of the ACA insurance carriers are forced to cover more high-risk individuals and in turn, have one of three options, increase everyone’s premium drastically, keep their rates competitive and hope for the best or leave the market altogether.  With almost no carriers making a profit in the individual market that is why we are seeing them leave the exchange.

So again, why does this not really affect your group plan?  The simple answer is that you maintain competition.  Without the mergers happening two more insurance carriers will stay to compete in the group market.  The other reason, especially for business under 51 employees, the way the ACA law works is that the premium cost is calculated based on a person’s age and where they live and nothing else. For example in IL almost every company that has less than 51 employees will get the cheapest rates from Blue Cross Blue Shield when you look at comparable plans.  By maintaining competition, you allow for more insurance companies to fight for the lowest cost. 

If you are currently in a group plan, you should be happy that the government blocked this merger.  It will more likely than not keep the cost of your premium from jumping up even high than the high projections for 2017. 

For more information about group medical insurance or want to learn how to get all your HR and benefits needs taken care of visit us at groupbenefitsmadesimple.com. Make sure to also like us on Facebook and follow us on Twitter and LinkedIn to stay up to date.