America's biggest health insurance companies are about to become bigger. In recent months, Anthem announced plans to buy Cigna, and Aetna announced a deal to acquire Humana. That will leave only three major national companies.

Will less competition lead to higher prices? Will it mean lower quality coverage?

At a recent hearing of the House Judiciary Committee, an industry group, America's Health Insurance Plans, tried to dampen those concerns, while the American Hospital Association and the American Medical Association, along with two health policy experts, warned that consumers could be in for rough ride. (To see a video of the hearing, click here.)

The industry contends that the mergers are needed to counter recent consolidation among health care providers. In market after market, combinations of hospitals have created large health systems, often adding physician practices to the mix. When a market is left with just one or two of these behemoth organizations, insurers lose much of their clout to bargain for lower prices.

But health policy experts point out that lower payments to providers do not always translate into lower premiums. If an insurance company faces limited competition, there is little pressure on it to pass along cost savings to consumers.

Who is right?

As my colleague Mark Pauly observed in a previous Field Clinic post, the answer depends on which insurance market you are talking about. The market for coverage offered by large employers is different from the market for coverage offered by small insurers, which, in turn, differs from the market for individual policies under Obamacare and the market for private plans sold to seniors under the Medicare Advantage program.

The markets that are most vulnerable to insurer consolidation are the last two. In both of them, consumers purchase policies directly from an insurance company. Unlike employers that purchase coverage for a group of workers and their dependents, consumers who deal with an insurer on their own have no bargaining power and little recourse if premiums skyrocket.

That could spell trouble for both Obamacare and Medicare Advantage. Both programs rely on competition among insurers to keep prices in check. If competition becomes more limited, policies sold through those programs could become unaffordable for many.

The bottom line is that if you get coverage through an employer, you probably won't see much change from the mergers. But if you buy your coverage through an Obamacare exchange or are a senior who has opted for coverage under Medicare Advantage, there is a good chance your wallet will see the effects.

The mergers still require approval by the Justice Department before they can proceed, and that is not assured. If enough evidence accumulates of an impending tsunami of price hikes, the government might well block the deals and the threat would subside, at least for the time being.

In a rare show of bipartisan agreement, Judiciary Committee members from both parties concurred that the mergers are troubling. But their consensus didn't last long once Obamacare entered the discussion. Republicans blamed the law for promoting health care consolidation, and Democrats responded that the merger trend began before long before the law was passed.

Health care is changing rapidly, and Obamacare is just one part of its transformation. Advances in technology and demographic shifts are driving both structural changes and cost pressures that are entirely independent of the law. The merger wave among insurers shows how important it is that the industry, its regulators, and politicians move beyond well-worn partisan debates and work together to help consumers weather the storm.

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