Because of these insurers' entrenchment in their markets, other plans have decided it wouldn't be cost-effective to compete against them. It's also important to understand that in many regions, local Blues plans dominate simply because they've been around for a long time. There's also evidence that where there are fewer insurance companies, costs are lower because the insurers can drive harder bargains with hospitals and physician groups. A new Health Affairs study blames this shift for much of the rise in insurance costs in California. As a result of this consolidation, healthcare systems across the country have more bargaining power than they did in the 1990s.
Similarly, the government has not made a strong effort to block the growth of big hospital systems, and some of the cases it has brought have failed to stop hospital mergers. There is no indication that DOJ is about to change its stance. But over the past decade, it has allowed several very large mergers involving insurance giants like WellPoint and UnitedHealth Group. Of course, the Justice Department could prevent future mergers of insurance companies, even if the antitrust exemption wasn't rescinded.
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