Mergers & Trends to Watch in 2016
- Aetna & Humana and Anthem & Cigna: Keep watch and see if the Department of Justice allows the mergers to proceed. A final decision will most likely not occur until after the second quarter. Also expected to have a say in the decision are the companies’ shareholders, consumer groups, and of course, the politicians.
- 2016 Election & Obamacare: Speaking of politicians, the 2016 election is starting to heat up with both sides eager to take the reins of the ACA. Republican candidates are vocal as to why it needs to be repealed and are coming up with various versions for its replacement while democrats argue for a single-payer system.
- The Rise or Demise of Consumer Operated and Oriented Plans: 2015 saw a drastic decline in CO-OPS, with only 11 out of 23 original CO-Ops still in operation. 10 of the 11 have suffered losses of over $20 million. How will these dismal results and pure failures impact the unstable exchanges? Only time will tell.
- United Health Care on the Exchange: The largest insurer in the US made headlines this fall when they adjusted their earnings outlook due to losses in ACA. Although Aetna will cut two states in 2016 from their plan offerings, and Anthem acknowledged lower than expected ACA enrollment, both announced their commitment to the exchange model. Look to how other carrier fare in 2016 and whether or not UHC will continue to participate in public exchanges in 2017.
- Rising Drug Costs: Already on the agenda for the upcoming election, rising drug costs and soaring medical costs are a big concern for consumers and politicians alike. One problem is the loophole in doctor dispensing capabilities in which newly created drug doses are introduced to bypass regulation, allowing for egregious markups in drug costs. When doctors get kickbacks from prescribing and dispensing these same drugs in lieu of regulated doses, carriers are left paying the bill. However, many also blame the insurance industry due to the limited availability of certain drugs on their health plan’s list of covered drugs. Specialty drugs are expected to rise more than 20% in 2016 making it even more crucial that