CVS/Aetna, Cigna/Express Scripts Megamergers Could Lower Long-term Medical Costs

The vaguely outlined collaborative between Amazon, Berkshire Hathaway, and J.P. Chase Morgan poses no short-term threats to established health insurance companies, Moody’s says.

The proposed acquisition of Aetna by CVS Health and Cigna Corp. acquisition of Express Scripts will be a short-term ding on their credit outlooks but could lower medical costs in the long run, Moody’s Investors Service says.

“Both of these mergers are designed to better control rising medical costs, which is one of the most vexing problems facing health insurers,” Moody’s says this week in its Healthcare Quarterly.

Prescription drug prices are a big driver of rising medical costs, and the Health Care Cost Institute reports that prescription drugs increased from 17% to 19% of the...