Newest health care merger a bad sign

by Anant Naik

Over the past several years, the Affordable Care Act —commonly known as “Obamacare” — has placed a concerted effort on reducing the cost of health insurance premiums so that more American families can buy them at an affordable cost. The Affordable Care Act attempts to increase competition in the insurance markets, thereby lowering costs for consumers. However, over the last several weeks, we’ve seen large insurance conglomerates take some actions that will undermine these very efforts.
Health insurance provider Anthem announced on Friday it plans to purchase provider Cigna, creating one of the largest health insurance aggregates in the market. Soon, only three major companies will remain in the national health insurance market. 
This move harms our country, and our anti-trust regulatory measures should attempt to disallow it. Reducing the number of competitors in health insurance markets has historically led to higher premiums, causing direct and serious harms to consumers. 
From a theoretical standpoint, increasing the number of competitors in a market for a good (in this case, health insurance) leads to a decrease in prices. This happens because everyone in the market is looking out for their own profits, and the lowest possible price will typically lead to more consumers wanting a particular good.
A Northwestern University study explains that in the past, a limited number of health insurance providers caused the price of health insurance premiums to spike by nearly 7 percentage points over about eight years. 
Higher health insurance costs harm consumers in obvious ways. If health 
insurance costs were higher, fewer people would be willing to buy health insurance. Without it, people could face a host of health risks, leading to a continuation of our nation’s health care problems. 
It’s important to understand that the Anthem-Cigna merger won’t affect many people directly. Large corporations that buy health insurance from these companies and provide it for their employees have bargaining power, as they are large consumers in the market. However, small businesses that are paying for their workers’ health insurance are going to be hit the hardest if this process truly leads to higher premiums. 
The Affordable Care Act has the goal of providing affordable health insurance to every family in America and to businesses that can’t afford health insurance for all of their employees. This effort will be undermined if mergers like that between Anthem and Cigna are allowed. 
By reducing the number of major health insurance providers, we harm many consumers and small businesses. Our government ought to push for an agency that protects the people whom this plan will adversely affect.