Tuesday, May 25, 2010

Blocking Mergers

Apparently the folks in DC who think they know everything have decided that health insurance companies who are on the edge over Obamacare (Patient Protection and Unaffordable Health Care Act) should just exit the market instead of merging with stronger carriers.

Yeah, that makes a lot of sense.

Instead of providing a sound base going forward, Washington wants to encourage those marginal players to simply exit the market.

The antitrust division "is committed to vigorously, but responsibly, scrutinizing mergers in the health care industry that appear to present a competitive concern," Varney told a joint meeting of the American Bar Association and the American Health Lawyers Association.

"If we determine that our initial concerns were well-founded, we will not hesitate to block the merger or to require the settlement concessions necessary to protect consumers," she added

How is encouraging weaker players to abandon the health insurance market a consumer protection?

Of course the Obama House and members of Congress have already demonstrated over and over again they have no clue about competition. In their mind, if a carrier dominates a geographic area it is prima facie evidence there is no competition.


Varney also put hospitals on notice that the government will investigate mergers "likely to reduce competition."

Ooooh . . . hospitals that are faltering will not be allowed to merge with stronger hospitals.

So much for saving or creating jobs and expanding the availability of health care.

New competitive insurance markets are a cornerstone of President Barack Obama's health care law. They'll open for business in 2014 to serve consumers who buying their policies directly, as well as small businesses.

Varney said the goals of health care overhaul "cannot be achieved" if insurer mergers reduce competition, or if big companies use their market clout to keep out upstarts.

Here is a clue.

Come 2014 there will be fewer health insurance companies and fewer plan choices, regardless of what the emperor wants. And there will be no upstarts.

In the last 5 years or so, even before Obamacare, there have been fewer new entrants in the individual major med and none that I am aware of in the employer group market. The only new players in individual major medical are Cigna and Aetna and both of those will probably bail before 2014.

This is change you really can believe in. Yes you can.
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