When Insurance Companies Merge


Giant Insurance Company Logo Collage (courtesy of Hartford Courant)

Depending on who you ask, insurance company mergers will either help or hurt consumers. Whether a merger in general is a good or a bad thing is debatable. The problem today is that there have already been so many mergers of insurance companies that we are heading directly toward an oligopoly or monopoly, which is a well-established BAD thing for consumers. Healthy competition is a building block to a free market economy.

Competition is a Spectator Sport (photo courtesy of Wikipedia)

As a general rule in the insurance world, any time the federal government is actually motivated to step in and do something, it’s probably because an issue of vital and imminent importance has entered their radar screen. And so, the Justice Department has stepped in to investigate the proposed mergers between Humana and Aetna, and Cigna and Anthem.

The Hartford Courant (based in the U.S. headquarters of the insurance industry, Hartford, CT) has written a very nice article about how different sectors of the population will be affected in the event of the proposed merger of these giant insurance companies – seniors, low income families, employers, and physicians and health care providers.

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