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Mergers Shrink New Hampshire Insurance Market

The number of health insurers in New Hampshire shrank by one this morning with the newsthat the state’s two largest players, Anthem and Cigna, have agreed to merge in a deal worth more than $48 billion.

The merged company will insure 410,000 Granite Staters, or 65 percent of the market, according to the most recent figures from the New Hampshire Department of Insurance. The next largest company, Harvard Pilgrim, has 148,000 policyholders. Nine other carriers - including Aetna, which recently agreed to buy Humana, Inc. - insure fewer than 75,000 people combined.

Deputy Insurance Commissioner Alex Feldvebel says it’s not yet clear what effect the Anthem-Cigna merger will have on consumers. The two companies control different market segments, he said, with Anthem specializing in fully-insured plans and Cigna more dominant among large employers who self-fund.

“As a consumer you want your insurer to have bargaining power with doctors and hospitals – that’s what you’re buying when you buy insurance, so you want them to be large,” Feldvebel said. “On the other hand, you want them to be in competition with other insurers to have the incentive to provider the lowest rates and the best quality.”

The Anthem-Cigna merger combines the nation's second- and fifth-largest health insurers and comes just three weeks after Aetna, another so-called "big five” carrier, announced its deal with Humana.

The wave of merger activity is driven by the desire to reduce costs and increase economies of scale in the wake of the Affordable Care Act. But, according to the Wall Street Journal, government regulators will likely want to examine how it will impact consumers and providers before signing off on the two deals. 

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