Can Biden’s DOJ fix Obamacare’s issues
The Biden Administration’s Battle Against Health Insurance Consolidation
The Biden administration is fiercely opposed to consolidation within the health insurance industry, and they have Obamacare to blame for it.
While the 2010 Affordable Care Act is not solely responsible for the trend of fewer insurers dominating the market, it certainly played a significant role.
The Biden administration’s Justice Department is currently investigating UnitedHealthcare for potential antitrust violations. The investigation focuses on the relationship between the company’s insurance unit, UnitedHealthcare, and its health-services arm, Optum, which owns various healthcare assets, including physician groups.
However, it is important to note that Obamacare was designed to encourage consolidation within the healthcare sector. The architects of the bill themselves acknowledged that it would promote integration across all aspects of care.
Commentator Jeffrey Singer pointed out that “no part of healthcare was supposed to be spared” from consolidation. Doctors, hospitals, insurers, and pharmaceutical companies were all incentivized to merge through regulatory and financial measures.
Recent history reflects this push for consolidation. In 2021, Cigna announced talks of a merger with Humana. In 2016, the Department of Justice blocked the mergers of Anthem and Cigna, as well as Humana and Aetna.
Reuters reported last year that these proposed mergers were a direct result of the Affordable Care Act, which was fully implemented in 2014. The article listed numerous acquisitions and mergers that took place since Obamacare became law, including CVS’s acquisition of insurers and providers, as well as UnitedHealthcare’s purchase of providers.
A study by the American Medical Association confirms that the health insurance industry is indeed consolidating, with most insurance markets being more consolidated now than they were a decade ago.
Furthermore, the regulations within Obamacare are driving large insurance companies to acquire medical practices. Specifically, insurers are required to meet a minimum “Medical Loss Ratio,” meaning they must allocate a certain portion of their funds towards paying providers. To meet this requirement, insurers often provide bonuses to the doctors’ practices they own.
This consolidation game benefits no one and is much easier for the larger players to navigate.
Unsurprisingly, doctors are unhappy with this trend. Jeffrey Davis from the American College of Emergency Physicians predicts that the significant increase in insurer consolidation witnessed across the country is unlikely to slow down any time soon.
Healthcare scholar Michael Cannon from the Cato Institute explains the phenomenon of consolidation among providers and insurers in a 2022 paper. He highlights that regulation, in general, tends to drive consolidation by increasing overhead costs. Additionally, the intertwining of government and industry further fuels consolidation by giving more power to well-connected lobbyists and revolving-door consultants.
Ultimately, Obamacare has resulted in fewer choices for consumers, as Big Government becomes a home game for Big Business.
What are the potential negative impacts of consolidation within the health insurance industry for consumers?
5, CVS Health acquired Aetna in a $69 billion deal, creating one of the largest healthcare companies in the United States. These are just a few examples of the consolidation that has taken place in the health insurance industry in recent years.
Consolidation within the health insurance industry has raised concerns about reduced competition and increased prices for consumers. When fewer insurers dominate the market, they have more power to dictate prices and limit options for consumers. This can result in higher premiums and less choice when it comes to healthcare coverage.
The Biden administration has made it clear that they are committed to addressing this issue. The investigation into UnitedHealthcare is just one example of their efforts to combat antitrust violations within the industry. They have also signaled that they will take a more proactive approach to reviewing and challenging proposed mergers and acquisitions.
In addition to enforcement actions, the administration is also considering policy changes to promote competition in the health insurance industry. One proposal is to allow Medicare to negotiate drug prices, which could help lower costs for consumers and reduce the power of pharmaceutical companies.
There are also calls for increased transparency and oversight of consolidation within the industry. Critics argue that mergers and acquisitions often happen behind closed doors, without sufficient scrutiny from regulators. They argue that greater transparency and oversight would help ensure that consolidation is not driven solely by profit motives, but also considers the impact on consumers and the overall healthcare system.
The battle against health insurance consolidation is not an easy one. The industry is deeply entrenched, and mergers and acquisitions have become a common strategy for growth and profitability. However, the Biden administration’s commitment to addressing this issue is a step in the right direction.
By challenging antitrust violations, considering policy changes, and advocating for increased transparency and oversight, the administration is sending a clear message that they will not tolerate an industry dominated by a few powerful players. They recognize the importance of competition in driving down prices and ensuring access to affordable healthcare for all Americans.
It remains to be seen how successful the Biden administration will be in its battle against health insurance consolidation. It is likely to face strong pushback from industry stakeholders who benefit from consolidation. However, by keeping a focus on the needs of consumers and the overall healthcare system, the administration can make progress in promoting competition and affordability in the health insurance industry.
Only time will tell if their efforts will be successful, but one thing is clear – the Biden administration is committed to fighting against consolidation and ensuring a more competitive and accessible health insurance market for all Americans.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases
Now loading...