This week Anthem (until recently known as WellPoint), the second-largest health insurance company in the United States, announced it had reached a buyout deal with the nation’s fifth largest health insurance company Cigna. Once joined the new company will provide private health insurance to an estimated 53 million customers – the largest of any private health insurer in the country.
Anyone who is following the news with the nation’s leading health insurance companies will have noticed a recent trend: mergers. This latest Anthem-Cigna news comes on the heels of another merger announced at the beginning of this month, that of Aetna’s buyout deal struck with Humana. This new company now counts 33 million customers.
In fact, prior to the announcement of this deal Cigna had been competing with Aetna to merge with Humana. Cigna had also recently rejected a takeover deal proposed by UnitedHealth Group, the nation’s largest health insurance company if measured by total revenue.
Once the merger proposals are finalized, the health insurance scene will be dominated by UnitedHealth Group, Anthem, and Aetna, with plenty of medium-sized health insurance providers that will likely change ownership in the next few years – if not months.
Largest US health insurance companies ranked by revenue, prior to these mergers:
- UnitedHealth Group – $222.49 billion in revenue, 2013
- Anthem, previously known as WellPoint – $61.7 billion in revenue, 2012
- Kaiser Permanente – $51.3 billing in revenue, 2013
- Aetna – $47.29 billion in revenue, 2013
- Humana – $41.31 billion in revenue, 2013
- Cigna – $29.12 billion in revenue, 2012
What these mergers mean for medical billing and coding professionals
Why have there been so many mergers recently? The short answer to this question is the Affordable Care Act. When this law was passed it placed new restrictions on the ways health insurance companies could make profits, as well as the amount of profits that could be made from insurance plans. These mergers are a result of health insurance companies adapting to the new marketplace created by the Affordable Care Act.
Instead of plan-centered profits these companies are now looking to generate revenue by merging, and then cutting redundant positions. Becoming bigger through mergers also means the health insurance giants can make larger investments in new technology and negotiate better contracts with medical professionals.
For medical billing and coding professionals, these mergers have some advantages as well as disadvantages. Starting with the negatives, there are bound to be some consolidations for billing and coding professionals, however most of these will be felt by administrative staff. As companies merge it will also become more worthwhile to invest in billing and coding software that improves efficiency.
However, while there may be some rearrangements on the smaller scale, more Americans continue to gain healthcare coverage, and more baby-boomers continue to require more medical services. So the overall demand for billing and coding professionals should continue to increase throughout the industry, and not experience any major offsets posed by consolidations or software developments.
Within larger organizations billing and coding professionals also have the potential to become more specialized in a particular area of their field, and greater specialization can translate into a higher salary.