Less competition in insurance industry

[Guest Nienke]

How does the shrinking number of insurance groups (due to M&A+) have an impact on benefit plans? Especially with the soaring costs of healthcare plans, what does this mean with less competition for quotes?

[mroberts]

Obviously less competition is going to breed higher rates. The more competition, as with any product, is going to lead to better plans with lower costs. When carriers have less competition, inefficiencies and waste which would normally be addressed in a tighter market go unfixed for longer periods of time.

Are the increases going to be significant? Probably not, however, if you're going from three carriers to two or from two carriers to one, then the costs may be siginificant since it would almost be a monopoly.