Reports of Cigna and Humana merger
Plus: Trump says he will repeal ACA, again
Good morning, happy Friday and welcome to December (already). This is your weekly e-newsletter from Fulcrum Strategies known as the Friday Pulse Check; it is also known as your weekly digest of some of the most important and interesting healthcare stories from the week. If this email was forwarded to you by a friend, do us a favor and click subscribe.
In the news:
Reports of Cigna and Humana merger
On Wednesday, the Wall Street Journal reported that healthcare giants Cigna and Humana are in talks of merging. The deal would be a combination of stock and cash and would be finalized by the end of the year. Shares of both Cigna and Humana slumped on the news Wednesday and have not totally rebounded. Read more in Reuters.*
LIVE Cigna stock price: CI 0.00%↑
LIVE Humana stock price: HUM 0.00%↑
Will there be anti-trust scrutiny?
Undoubtedly this will be subject to some sort of FTC scrutiny. As you may be aware, insurance companies are generally exempt from anti-trust legistlation, but as David Wainer writes in the Wall Street Journal, that scrutiy will likely fall on both Cigna and Humana’s pharmacy benefit manager business. Read more in the Wall Street Jouranl via Microsoft Start.
Why a merger?
As we shared on the FLATLINING Podcast in November, Cigna is exploring getting out of the Medicare Advantage business. That particular company has some how managed to make a product that is extremely lucrative for other insurers a problem for themselves. Additionally, Humana announced earlier this year it would be eliminating its commercial line of business and instead, electing to focus soley on managed Medicare and Medicaid. This makes it so both of these companies have little overlap and are uncompetitive in the marketplace.
That all being said, the stock price slump could signal pushback from shareholders, as reported by CNBC. Watch below:
Wendell Potter, a former Cigna executive shared his thoughts on his Substack, HEALTHCARE un-covered:
We’ll talk more about this next week on the FLATLINING Podcast and what it could mean for your practice.
*Why a Reuters article instead of the original Wall Street Journal article? The Reuters article isn’t behind a paywall.
Other articles of interest:
BCBS Michigan reaches tentative deal with UAW over striking workers - Becker’s Payer Issues
Opinion: Sen. Elizabeth Warren (D-MA) has an Obamacare epiphany - The Wall Street Journal 🔒
HIPAA Violation of the Week: Illinois Supreme Court finds medical workers are exempt from certain privacy laws - St. Louis Public Radio
California Watch: FL Gov. Ron DeSantis (R) holds up San Francisco “poop map” during debate with CA Gov. Gavin Newsom (D) on FOX News - The San Francisco Chronicle
Healthcare in the 2024 election
This week on the FLATLINING Podcast, we shared our third Pulse Check on the Candidates episode. This time we focused on former United Nations Ambassador and former South Carolina governor Nikki Haley. Haley, unlike other GOP candidates, has had specific ideas when it comes to healthcare policy.
I don’t want to spend too much time recapping it here since we have been recapping the Podcast on Mondays. I encourage you to check out the program though this weekend.
Subscribe to the FLATLINING Podcast on Apple Podcasts, Spotify, the iHeartRadio app, Amazon Music, Google Podcasts, Stitcher, Pandora, TuneIn, and Audible.
This week, however, former President Donald Trump made news when he said he wanted to go after the Affordable Care Act again. Trumps renewed criticism of Obamacare was sparked by the Wall Street Journal Editorial Board article that I linked above: Opinion: Sen. Elizabeth Warren (D-MA) has an Obamacare epiphany - The Wall Street Journal 🔒.
Following that article’s publication, Trump said on his Truth Social platform that he was “seriously looking at alternatives” to the Affordable Care Act.
Here is a friendly reminder to you: Trump ran on and tried to repeal the ACA in 2016 and 2017 respectively. He couldn’t do it, even with a Republican-controlled Congress.
Additionally, no one is really talking about Obamacare anymore because…. most people don’t care about Obamacare anymore. Those who have plans from the Marketplace generally like them and Republicans have learned that it is way too easy for Democrats to say “you’re taking away people’s healthcare” when they talk about repealing the ACA.
There are legitimate criticisms about the ACA: many markets only have one plan so there isn’t enough competition, recent Democratic legislation that expanded ACA subsidies is expensive, or the ACA furthers the problem of large insurers beating down on doctors.
Trump has yet to reveal any sort of replacement plan for the Affordable Care Act. One Republican who is close to the campaign told POLITICO, “There’s not a real ‘there’ there. No one’s working on this.” A Democratic pollster told the magazine that healthcare is a winning issue for Democrats and that for all of Biden’s faults, it is good to know that “Trump can still [f***] up.”
If he wants to survive Democratic attacks on this issue and show those of us in the healthcare world that he is worth our vote, he has to show his ACA replacement plan soon.
Have a good weekend,
Matthew