Consumer advocates are trying to convince regulators in that state and several others to scrutinize these deals.
California is rapidly turning into the center of the controversy over the massive mergers that are going on in the health insurance industry as one company swallows up the next, shrinking the competition.
Consumer advocates have been asking for greater scrutiny of this trend on over a dozen states across the U.S.
In California and about twelve other key states, consumer advocates have been asking regulators to take a closer look at the results of the health insurance company mergers, based on fears that consumers will find themselves with considerably fewer choices and costs will start to rise. Many of the lowest prices are available in states where the competition is greatest, as rival companies are driven to keep prices as low as possible in order to appeal to consumers over the competition.
The concern is that as large health insurance companies continue to merge, the prices for consumers will spike.
At the moment, the playing field appears to be set up to have enough deals close to leave three major health insurers with a share the size of almost half the entire American commercial insurance market.
Currently, Anthem Inc is attempting to acquire Cigna Corp for a reported purchase price of $54.2 billion. Similarly, Aetna Inc is hoping to absorb one of its main competitors, Humana, at a price tag of $37 billion. This would bring both Anthem and Aetna to the upper level of the industry, along with the other current leader, UnitedHealth Group. A notably smaller, but still very large acquisition is also in the works as Centene aims to take over Health Net Inc of Woodland Hills for $6.8 billion. All of these will have an impact on the Californian marketplace.
The two insurance industry regulators in California have already started holding public hearings with the intention of discussing the mega-merger trend and those acquisitions that are already in the works. It is expected that more will be held over the weeks to come, especially on the topic of Anthem, which is the seller of Californian Blue Cross policies, among other states.