Obamacare pushing toward mergers
Five years after its passage, I continue to hear from my constituents about how disastrous Obamacare has been for them and their families. It's caused increased premiums, reduced coverage and choice, and in some cases, the closing of hospitals altogether.
Now the announced sale of Kentucky-based Humana, a health insurance company, reveals yet another pitfall of the law. The sale is the inevitable result of Obamacare's push toward consolidation as doctors, hospitals, and insurers merge in response to an ever-growing government. And the resulting consolidation means less competition among insurers, which could leave consumers with even fewer choices and lower-quality care.
For insurers, Obamacare has made it much more expensive to do business in the health care market. The many layers of regulation spawned by the law mandate less choice and reward bigger scale over more competition. It's also unleashed an avalanche of new requirements for insurers to deal with. Merging into bigger firms, which are better able to absorb the costs of Obamacare and comply with the maze of regulations, has become the answer.
Such mergers may satisfy an overzealous government bureaucrat, but they don't necessarily help consumers — including millions of Kentuckians. What's worse, when there are fewer players in the health insurance market, there is less drive to innovate.
This urge to merge, to borrow a phrase from American Enterprise Institute resident fellow Dr. Scott Gottlieb, hasn't affected only health insurers. We have seen doctors' offices, hospitals, and pharmacies consolidate under the heavy burdens of Obamacare. Take the number of hospital mergers. Research Dr. Gottlieb cites in a recent Wall Street Journal column reveals that 95 hospital mergers occurred in 2014, 98 in 2013, and 95 in 2012 — compared with just 50 hospital mergers in 2005 and 54 in 2006. Lost in all these corporate maneuvers are the best interests of the consumer to get high quality service for a low price.
When Obamacare was being debated in the U.S. Senate in 2009, I predicted that choice and competition would decrease as a result of the destructive law. Now these consequences have come to pass, and Kentuckians are paying the price. The announced Humana-Aetna merger is just the latest example.
For more than 30 years, Humana has been a cornerstone of economic growth in the Bluegrass State and a great philanthropic partner in the community. It is the state's only Fortune 100 company and one of the biggest employers in Louisville, with thousands of employees and direct contractors.
While I will continue to strongly encourage Humana's buyer, Aetna, to keep its commitment to jobs in Kentucky, much is in jeopardy with Humana's sale to an out-of-state company. I hope that Aetna will recognize the tremendous value and expertise residing in Humana's Kentucky workforce and will look to continue its close partnership with our experienced and educated workforce, the City of Louisville and our Commonwealth.
Whatever the outcome, Obamacare is the reason for doubt about Humana's future in Kentucky. The changes to the health care market it has caused may benefit the big companies but they risk leaving behind individual consumers.
By: Mitch McConnell
Related Issues: Health Care, Obamacare