News from SRG

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...Aetna, Cigna, Humana, United Health Group and Anthem. But wait, The Big Five? Or the Big Three? With the rumors of upcoming mergers and acquisitions, the Big Five could become the Big three. Humana and Cigna might no longer be apart of the group.

Humana with the help of Goldman Sachs is considering selling, which could be very valuable acquisition for other insurance companies. Humana’s Medicare business is steadily growing and could potentially be very valuable.

Anthem and Aetna would be the most logical acquires. Humana and Anthem would work well because they would make up for each other’s weakness. Humana has a large Medicare population, but Anthem does not. Anthem preforms well in the health exchange market, but Humana does not. An Anthem acquisition would create a well-rounded strong company.

Aetna is trying to acquire Humana to dominate the Medicare field- an area where Aetna is weak. Not only is Aetna targeting Humana, but they have their eyes on Cigna too. It is possible that they may try to combine both Cigna and Humana as a merger-of-equals. Humana is not keen on this idea.

Rumors of the sale may be spreading, but Humana remains weary of making any decisions. The possibility of the Health insurance market becoming a single-payor insurance market could threaten Humana. It is a primarily membership-driven organization a single-payor insurance market would render it no longer competitive.

Health Insurance companies are looking to gain more consumers and consolidate. The Big Five are not only targeting each other, but even smaller insurance companies that could strengthen any of their weakness. For example, Anthem is looking to acquire Simply Health Care Holdings to strengthen its presence and relationship with the Medicare and Medicaid population in Florida.

The primary goal is to add consumers and create stronger programs. The Big five, or Big Three, want to strengthen their programs and increase their membership. They are looking to make beneficial acquisitions and dominate all areas of the healthcare field.

Now it is time to wait to see what plays out between the Big Five. Will the major Health Insurers stay the Big Five or will they become the Big Three?