Owing to the proposed merger different stakeholders have questioned the decision while trying to gauge its impact on the level of competitiveness in the healthcare market. The merger is bound to increase the cost of insurance significantly across all the states. This could also make it hard for other new entrants from having their way into the market (Hervey, Muhlestein & Bordelon, 2015). However, while taking a look at the major players many have diversified their product offering and thus likely to mitigate the risk due to the expanded approach across all segments. By so doing this is bound to as well help lower the administrative costs thereby also ensuring value provision to their valued clients.
Eventually, consumers are more likely to benefit more from availed products. This is bound to continue being experienced for a long time. If approved such a decision is likely to bring about a shift in the healthcare insurance sector. On the other hand, the trend doesn’t imply an equal approach is taken because of the level of change differing across all the markets but could as well have an adverse effect on most consumers (Gruessner, 2016).
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By utilizing the Herfindahl-Hirschman index, the approach is able to help us arrive at a great conclusion. For instance, while dealing with a competitive market the resultant result is likely to approach a zero. On the other hand, those markets found to have a higher HHI value may be too concentrated thus also less competitive. However, those markets with an about 0.25 are considered to be moderate thus less concentrated. The level of concentration is ideal in determining whether a given market is dynamic (Hervey, Muhlestein & Bordelon, 2015).
In conclusion, in spite of different approaches being used to gauge the impact of the proposed merger, the merger is could to a great extent negatively impact most consumers. It might as well take a bit of time before the rest of the markets conform to change as soon as the decision is approved.
References
Hervey , D. , Muhlestein , D. & Bordelon , A. (2015). How might proposed payer mergers impact state insurance markets. Health affairs. Retrieved from https://www.healthaffairs.org/do/10.1377/hblog20151201.052023/full/
Gruessner , V. (2016). Major health insurance mergers may leave consumers “worse off. ” Health payer intelligence. Retrieved from https://healthpayerintelligence.com/news/ major-health-insurance-mergers-may-leave- consumers-worse-off
