Big health insurers want to get bigger to cut costs and fatten profit, of course, but seem to be moving faster now to consolidate in response to mergers elsewhere in the health care system. Bigger pharmaceutical companies and merging hospitals may require larger, more powerful insurers to represent patients.

So, eager perhaps to prove its determination to investors, Anthem (ANTM) last week took the unusual step of publicizing details of its takeover talks with Cigna (CI), leading the Bloomfield, Conn.-based Cigna to publicly admit that it's "deeply disappointed" with how Anthem disclosed its latest $54 billion offer .

Meanwhile, Humana (HUM) has offered itself up for sale and is being pursued by Aetna (AET), which reportedly is being courted by UnitedHealth Group (UNH), the nation's largest health insurer.

The possible post-merger scenarios include Anthem, Aetna and UnitedHealth lording over the U.S. health insurance sector. It could be just Anthem and UnitedHealth when the dust settles.

Why now? The big insurers also may be feeling more pressure to merge as soon as possible knowing that subsequent M&A proposals will invite greater antitrust scrutiny.

But the Big 5 health insurers may be too big and too late to avoid critics.

"A lack of competition clearly exists today and speaks loudly against any further consolidation in the health insurance industry," the chairman of the American Academy of Family Physicians wrote to the Federal Trade Commission this month.

Addressing Rising Costs

Still, there's reason to cut costs and gain leverage via mergers.

Last year, prescription drug spending rose 13.1% to a record $374 billion, according to the IMS Institute for Healthcare Informatics, with hepatitis C treatments among the most expensive new blockbusters.

Consolidation will give insurers more leverage to negotiate prices with doctors, hospitals and drugmakers, other sectors of the health care industry that have consolidated rapidly lately.

"They're trying to scale up in order to get more leverage over contracts with drug manufacturers and other health care providers," said Jeffrey Loo, an analyst at S&P Capital IQ.

Insurers may be feeling more pressure to grow now, having just absorbed new patients.

ObamaCare's creation of federally subsidized insurance exchanges used by 34 states has provided new options for millions of newly insured consumers, but only in the last two years.

Health care is one of the busiest industries for consolidation this year. Rite Aid (RAD) agreed to buy Envision Pharmaceutical Services for about $2 billion in February. The next month, UnitedHealth bought pharmacy benefits manager Catamaran (CTRX) for $12.8 billion. CVS Health (CVS) agreed this month to pay $1.9 billion to buy 1,600 Target (TGT) pharmacies in 47 states.

Tenet Healthcare (THC), HCA (HCA) and other major hospital operators have gobbled up smaller players in recent years.

Drugmakers are no slouches in the M&A department. In April, Teva Pharmaceutical Industries (TEVA) bid $40 billion for Mylan (MYL) after Perrigo (PRGO) rejected Mylan's $28.9 billion bid. In March, Dublin-based Actavis completed a $70.5 billion acquisition of Allergan, creating one of the world's top 10 pharmaceutical companies by sales, estimated at $23 billion in 2015. In June, Actavis changed its name to Allergan (AGN).

Nonprofits such as Kaiser Permanente and Blue Cross Blue Shield are seeking to grow through the exchanges, Morningstar's Vishnu Lekraj said.

Medicaid expansion by the federal government is rippling through the rest of the market.

Although big health insurers' revenues have been growing in the high single digits, their margins have been relatively flat, Loo said.

Striking With Hot Irons

Merger mania has struck the health insurance sector's Big 5 at a time when their stocks are among the best performers in the market. Anthem, Cigna and Aetna shares hit record highs again Tuesday. UnitedHealth gained 22% so far this year, up 2% to a record 122.74 Tuesday. Up 32.7% since Jan. 2, Humana shares flattened Tuesday at 189.86. IBD's Medical-Managed Care industry group has risen 52.5% in the past year compared to the S&P 500's 8.1% gain.

"That kind of consolidation for the big companies," said Gerald Kominski, director of the UCLA Center for Health Policy Research, "that's really the only way that they can grow" faster than organic growth.