Major payors are expected to buy more small regional health insurers that won’t be able to meet some expensive requirements of healthcare reform, according to a report by the American Medical News.
Analysts say many small plans do not have the capital to update technology and comply with minimum coverage and spending rules under reform. They say the large payors believe such deals can more readily meet federal antitrust scrutiny than mergers with large plans.
As a model for such deals, analysts point to Coventry Health Care's purchases this year of two Midwestern plans from small Catholic health systems. Meanwhile the CFO of UnitedHealth Group noted in September that plans could merge with or take members from plans pulling out of a market.
Federal enforcers, however, said payor mergers would be carefully scrutinized. Christine A. Varney, an assistant attorney general in the Antitrust Division of the Justice Department, said this year her office would "not hesitate to block the merger or to require the settlement concessions necessary to protect consumers" if the deal would affect competition.
Read the American Medical News report on payors.
Read more on payors:
-5 Things to Know About the DOJ's Healthcare Antitrust Enforcement and Competition Policy
-UnitedHealth to Launch New Program Standardizing Cancer Care
-Highmark Reports $187.7M Income for 2009, Explores Capitation Arrangements
Analysts say many small plans do not have the capital to update technology and comply with minimum coverage and spending rules under reform. They say the large payors believe such deals can more readily meet federal antitrust scrutiny than mergers with large plans.
As a model for such deals, analysts point to Coventry Health Care's purchases this year of two Midwestern plans from small Catholic health systems. Meanwhile the CFO of UnitedHealth Group noted in September that plans could merge with or take members from plans pulling out of a market.
Federal enforcers, however, said payor mergers would be carefully scrutinized. Christine A. Varney, an assistant attorney general in the Antitrust Division of the Justice Department, said this year her office would "not hesitate to block the merger or to require the settlement concessions necessary to protect consumers" if the deal would affect competition.
Read the American Medical News report on payors.
Read more on payors:
-5 Things to Know About the DOJ's Healthcare Antitrust Enforcement and Competition Policy
-UnitedHealth to Launch New Program Standardizing Cancer Care
-Highmark Reports $187.7M Income for 2009, Explores Capitation Arrangements