Big Insurers Cash In; Small Insurers Get Screwed

The next time you hear a Democrat pose and preen as a friend of small- and medium-sized businesses, keep this in mind:

Headline from The New York Times: “Health Care Law Recasts Insurers as Obama Allies.”

What the Times means is big insurers. Odd they never make that differentiation.

“Insurers and the government have developed a symbiotic relationship, nurtured by tens of billions of dollars that flow from the federal Treasury to insurers each year,” said Michael F. Cannon, director of health policy studies at the libertarian Cato Institute.

So much so, in fact, that insurers may soon be on a collision course with the Republican majority in the new Congress. Insurers, often aligned with Republicans in the past, have built their business plans around the law and will strenuously resist Republican efforts to dismantle it. Since Mr. Obama signed the law, share prices for four of the major insurance companies — Aetna, Cigna, Humana and UnitedHealth — have more than doubled, while the Standard & Poor’s 500-stock index has increased about 70 percent.

Respectively, the overall healthcare insurance plan market share rankings of the four companies listed above are:

Aetna #4
Cigna #7
Humana #5
UnitedHealth #1

Meanwhile, the world of smaller healthcare insurers is not quite so rosy: “Small insurers devastated by big corporations in Obamacare state exchanges”:

The study also found that small-insurer offerings nearly vanished from the exchanges. In 2012, consumers in the individual insurance market on average could choose among 36 small-market company carriers in their state, each holding a market share of five percent of or less.

But by 2014 those consumers could on average choose from only three insurers in their state exchanges, a decline of more than 90 percent.

Oh, and insurance brokers?

“I think the time of the independent agent may be coming to an end,” one of the respondents told McKinsey.

“I think there is going to be an exodus of agents over the next 5 years,” said another to the surveyors. “Folks will slowly retire or partner with larger firms.”

And so we have yet another example of Dennis Prager’s observation that “Big Business Is Not Conservative.”


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