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Employers weigh in on health insurer mergers

Employers weigh in on health insurer mergers

Employers are deeply divided about the effect consolidation of big health insurers could have on them and their employees, according to a new survey.

Twenty-one percent of nearly 100 employers surveyed last week by Aon Hewitt said insurer consolidation will result in greater cost efficiencies and better cost management.

On the other hand, 46% of the surveyed employers said consolidation will result in fewer health plan options for them and for their employees.

One-third of respondents said consolidation will not have a significant impact on either themselves or their employees.

That difference of opinion among employers is not surprising, said Jim Winkler, Aon Hewitt's global chief innovation officer for health and benefits consulting in Norwalk, Connecticut.

“It is a balancing act,” Mr. Winkler said. On the one hand, consolidation will give insurers more clout in negotiating with health care providers, Mr. Winkler said. On the other hand, he said, employers are concerned that fewer and bigger health insurers will mean they will have less leverage in negotiating with insurers.

Employers also are divided on how insurer consolidation will affect their health plan strategies. For example, 54% said they are considering several strategies, including 38% who said they plan to reassess their current health care plan provider within the next two years; 13% said they are considering using services such as telemedicine to supplement what their health insurer now provides; and 5% are considering adding plans offered by regional or local insurers to supplement the plans they now offer from big national insurers.

On retiree health care coverage, just over three-fourths of the respondents said industry consolidation will not affect short-term decision-making; 14% said the potential for market disruption will encourage them to take a wait-and-see attitude; and 10% said consolidation will offer an opportunity to make changes to leverage the potential for market efficiencies, Aon Hewitt said.

The survey follows last week's announcements that Aetna Inc. will purchase Humana Inc. for $37 billion, and Centene Corp. in St. Louis will buy Woodland Hills, California-based Health Net Inc. for $6.3 billion.

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