Wednesday, November 7, 2012

Health Plan Purchases Point to Obama’s Reform Law Surviving, Even if He Loses

By Patrick Connole - November 6, 2012
On the day America elects a president, it is interesting to note that the country’s health insurance plans continue to elect to prepare for the full implementation of the current president’s health reform law with their unabated appetite for buying into the Medicare and Medicaid arenas. Humana Inc., on Nov. 5, became the latest player to grab for more of the government-sponsored health plan market with its announcement of its planned purchase of Metropolitan Health Networks, a Florida-based group that works in the Medicare and Medicaid spaces by coordinating care for beneficiaries. The list of health plans making such forays is getting longer. WellPoint, Inc. bought Amerigroup Corp. and Aetna Inc. purchased Coventry Health Care, Inc., and there are market expectations for moves to be made on companies like Health Net, Inc. and WellCare Health Plans, Inc. The game being played is to get ready for the expected increase in Medicare and Medicaid enrollees when the Affordable Care Act kicks into higher gear in 2014. State expansion of Medicaid through relaxed eligibility standards and other provisions in the law could see millions of new lives entering the government-sponsored health coverage sector, and it seems everyone wants to get a piece of the action.
Now, with the election being decided today, what if the man behind the so-called “Obamacare” is no longer sitting in the Oval Office? Won’t there be an end to the expansion dreaming of health plans? It seems the answer, at least through the billions of dollars being thrown around the M&A market, is no. There may be change coming to Washington, or just as likely a continuation of the present administration, but the reforms will go on in one way or another. What do you think? Are these recent purchases by major insurers a hedge move, or do they confirm to the market that even if there is a new president, the health reform law will live on?

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