NEW YORK (CNN/Money) -
They'll be bigger, but will they be better for you?
That's the question for millions of consumers whose managed healthcare providers announced on Monday they will merge with other companies.
Anthem said it was buying WellPoint. Both are major providers of Blue Cross and Blue Shield plans and combined they will create one of the country's largest health insurers.
Meanwhile, UnitedHealth, currently the top U.S. health insurer, said it was buying Mid Atlantic Medical Services.
What does that mean for you? Consider the potential benefits and downsides to each deal.
Anthem + WellPoint
Potential upside: There are a few potential plusses to the Anthem/Wellpoint deal, said Joy Grossman, associate director of the Center for Studying Health System Change, a nonpartisan research group.
Both companies are known for investing heavily in information technology systems and clinical management research, which considers how to improve services at lower costs and how to offer quality-based incentives to providers.
Given that record, Grossman said, they may together invest more money in research to improve service and care.
Also, both companies are known for being good at integrating their acquisitions. That increases the possibility that their transition to a single company will be a smooth one from the perspective of the consumer.
The new Wellpoint, as the newly merged company will be known, should also be a more effective competitor among insurers competing for the national accounts of large employers.
Keep in mind, though, healthcare premiums are driven by several factors, not just insurers, so any effects of such competition on premiums is relative to what the premiums might have been had the merger not taken place, Grossman said.
Potential downside: Now that they'll be a much larger company, attention to local plans' problems may become diluted.
In the experience of Tom Billet, a health benefits consultant with consultant Watson Wyatt, a merger between insurers can result in fewer plan options for employers. "It makes a difference in the choice of different models of plans," he said. Whereas an employer plan may have offered three or four options, that may get whittled down to two.
That doesn't necessarily mean employees would have fewer doctors to choose from, he said, since there has been a trend in the industry to offer the broadest possible list of in-network healthcare providers.
Potential neutral effect: In many ways, healthcare is a local issue. The prices consumers pay for a plan are determined, in part, by the negotiating leverage their insurer has with local healthcare providers, such as hospitals.
Since Anthem and WellPoint have operated in different markets to date, by merging they will expand their national reach as a company. But "they won't change their local market share," Grossman said. Hence, their local-market leverage likely won't be any greater or lesser than it already is.
UnitedHealth + Mid Atlantic Medical Services
Potential upside: The consumers most likely to be affected positively or negatively by the merger are those insured by Mid Atlantic, the smaller of the two players, industry observers said.
Here's why: UnitedHealth has invested a lot of money in its information technology systems and clinical quality management, so the benefits of that research may be shared with consumers in Mid Atlantic plans.
Plus, UnitedHealth may introduce its preferred provider plans and other products, which currently Mid Atlantic doesn't offer, Grossman said.
And for other residents in the seven states and the District of Columbia where Mid Atlantic now operates, that may mean more choice in plan options that they didn't have before the merger.
The reason? Often when there's a merger, said Billet of Watson Wyatt, plan members may get an expanded list of doctors whose services are covered under the plans of the newly merged insurer.
As with the Anthem deal, the merger between UnitedHealth and Mid Atlantic positions the new company to better compete for national accounts from large employers, possibly bringing pressure to bear on premiums.
Potential downside: As a strong local player, Mid Atlantic had incentive to quickly address complaints and problems with their plans. Now that it will be absorbed into a larger national player, the quality of local management may decline, Grossman noted.
While it's too early to tell with the deals announced Monday, when two insurers merge and there is less competition locally, there is some risk that "the regional impact can be very anti-competitive," said Robert Hunter, director of insurance for the Consumer Federation of America.
The CFA found, for example, that consumers did not benefit from the merger of two insurers in the Maryland-D.C. area a few years ago. "The CFA's complaint ratio went up," Hunter said. "We concluded the service got worse and prices went up."