States Can Contain Health Care Costs. Here’s How.
The nation’s second-largest health insurer, Anthem, is poised to acquire Cigna, the fourth- largest. Aetna, the third-largest insurer, is seeking to acquire Humana, the fifth-largest. If approved by the Justice Department, these mergers would produce companies controlling about 35 percent of the health insurance market.
.. today, fewer than 20 percent of doctors are in solo practice.
.. As provider organizations become larger, they gain more leverage in reimbursement-rate negotiations with insurers. To re-establish the bargaining balance between providers and insurers, insurers argue that they too must also get larger.
.. States could, for instance, either accept all insurers who seek to participate or select a limited number to sell coverage. New York chose the first course, permitting all willing insurers to join; California chose the second, selecting 12 of the 32 insurers that initially showed interest.
.. In both states, areas with more hospitals had lower premiums compared with areas with fewer hospitals. But in New York, areas with fewer insurers had higher premiums, suggesting that insurers kept the benefits of greater bargaining power for themselves.