The biggest health insurance deal ever was announced earlier this month.

And though it is yet to be reviewed by regulators, the proposed transaction has already prompted concerns about its potential impact in Georgia and elsewhere.

Aetna’s $33 billion acquisition of Humana will get close regulatory scrutiny by state and federal officials over its effect on competition and prices.

Central questions about the deal include:

Will it lead to higher health insurance premiums? Will it contribute to the trend toward limited consumer choice of medical providers?

A deal would substantially affect Georgia, if only because of the numbers of insurance consumers affected. The merger would double Aetna’s enrollment in the state to roughly 1.4 million.

State insurance regulators and the U.S. Department of Justice will review the transaction from a competition standpoint.

The Medical Association of Georgia, meanwhile, said Thursday that it has “grave concerns” about the merger and “is evaluating every option to protect physicians and patients in the state.”  

Such consolidation has swept across the health care landscape, including insurers, hospitals and physicians. Part of this change has stemmed from the Affordable Care Act.

Other health insurers are also seeking to increase their size. Centene, the parent company of Peach State Health Plan in Georgia, announced a proposed purchase of Health Net. And Anthem, parent of Blue Cross and Blue Shield of Georgia, has sought to snap up Cigna.

If the latter deal occurs, it would reduce the five large for-profit health insurers to three.

And to further complicate the situation, UnitedHealthcare, one of the big five, is reportedly weighing a bid to acquire Aetna.

Aetna CEO Mark Bertolini has said the insurer is ready for government examination of its Humana acquisition, and said it has already discussed possible divestitures to satisfy regulators’ concerns.

Bertolini said when the deal was announced that it “will allow us to continue to invest in excellent service for our members and strengthen our partnerships with providers to deliver high quality care at an affordable price.”

Lots of scrutiny ahead

Georgia insurance regulators plan to perform “an in-depth analysis of the proposed transaction’s effect on competition in this state,’’ a spokeswoman said this week.

“We haven’t received the filing yet,’’ said Laura Wright of the insurance department. After the review is done, the agency will hold a public hearing, she added.

Wright said Georgia Insurance Commissioner Ralph Hudgens “will make his decision based on the internal review and the hearing.”

Insurers see several advantages to big mergers.

The ACA caps how much insurers can profit from the individual plans they offer. That forces them to try to cut administrative costs, which is something they can do by serving more people, the Washington Post noted.

And as the insurers get bigger and gain more members, they will have more clout when negotiating prices with hospitals and other medical providers, and getting better deals on prescription drugs.

Bill Custer, a health insurance expert at Georgia State University, said recently that such insurer consolidation would significantly affect medical providers. As for consumer premiums, Custer added, “it’s too hard to tell” what the effect of insurer consolidation would be.

Those premiums are already rising “because the price of health care is going up,” he said.

The deal will have a major impact nationally on private Medicare plans known as Medicare Advantage, the Kaiser Family Foundation reported this week. Nearly 17 million Medicare beneficiaries, including more than 460,000 in Georgia, are enrolled in Advantage plans.

If combined, Aetna and Humana will have almost one-third of Medicare Advantage members in Georgia. That total would still trail UnitedHealthcare’s 49 percent share in the state.

Hospitals are skeptical

The almost frantic pace of consolidation in the health care business makes it hard to predict exactly the effects of such moves, experts say.

“The health industry is undergoing rapid change, and we have seen consolidation on both the health system side and the insurer side in recent years as these two forces jockey for market power,” said Cindy Zeldin of the consumer advocacy group Georgians for a Healthy Future. “Consolidation means fewer choices for consumers, and history shows that it can also result in higher prices.”

The Georgia Hospital Association sees potential trouble ahead with deals such as the one between Aetna and Humana.

“These type mergers could result in a significant increase in market power for the insurance companies while placing health care providers and consumers at a distinct disadvantage at the negotiating table,’’ Earl Rogers, GHA president, said in a statement this week. “Increased premiums may lead to even more individuals without access to affordable health care, while reduced payments to providers ultimately affect their ability to develop new and innovative ways to deliver care and to provide the level of care and services patients have come to expect in America. The Department of Justice and the Georgia Insurance Commissioner should examine this proposed merger very carefully.”

Duke University law professor Barak Richman said the U.S. Justice Department will probably review such deals market-by-market with an eye on the long-term competitive dynamics, Modern Healthcare reported.

Donald J. Palmisano Jr., executive director of the Medical Association of Georgia, told GHN on Thursday that an Aetna/Humana deal could end up increasing health insurance premiums and ratcheting down payments to doctors. The more health insurer competition, the lower the premiums, he added.

He said insurers already use their increased market power to limit consumers’ choices of providers in so-called “narrow networks.”

Palmisano cited a study that found that many health insurance exchange plans have what could be defined as “small” or “extra small” physician networks. The research defined a network as small if no more than 25 percent of physicians in an area are covered, and extra small if it covers less than 10 percent.

The health insurance industry has called these networks “high value.”

“The word we really should be focusing on is not ‘narrow,’ but ‘affordable,’ ’’ Graham Thompson, executive director of the Georgia Association of Health Plans, said recently.

“Consumers demand affordable options with access to doctors and hospitals with the best track record of delivering high-quality, cost-efficient care.”

State attorneys general may also look at the Aetna/Humana deal.

A spokeswoman for Georgia Attorney General Sam Olens told GHN that “the Law Department monitors antitrust activity, but I can’t comment on specifics.”