Alarm Raised over Health Insurance Mergers

Wednesday, September 09, 2015

The leading doctors’ group in the U.S. has come out against two proposed megamergers of health insurance companies.

The American Medical Association (AMA) said in a study released this week that plans by Anthem to acquire Cigna and Aetna to buy Humana will harm patients across the country. The AMA argues too many insurance markets are already dominated by a few companies, and allowing these mergers will only further concentrate insurance options.

The proposed Aetna-Humana deal, according to the AMA, “threatens serious and widespread competitive harm” to Medicare beneficiaries because it would reduce options in the market for private Medicare Advantage plans.

The AMA claims this merger and the Aetna-Humana deal could reduce competition in up to 154 metropolitan areas in 23 states. It would also exceed federal antitrust guidelines, in place to foster competition in the market, in as many as 97 metropolitan areas in 17 states.

“A lack of competition in health insurer markets is not in the best interests of patients or physicians,” AMA President Steven J. Stack said in a news release. “If a health insurer merger is likely to erode competition, employers and patients may be charged higher-than-competitive premiums, and physicians may be pressured to accept unfair terms that undermine their role as patient advocates and their ability to provide high-quality care. Given these factors, AMA is urging federal and state regulators to carefully review the proposed mergers and use enforcement tools to preserve competition.”

The AMA’s findings are consistent with data collected by the Government Accountability Office (GAO) on the subject of health insurance mergers, The New York Times reported. The GAO previously warned enrollment was already concentrated among the three largest insurers in most states, and that the three largest carriers had at least 80% of the enrollment in 37 states.

Furthermore, “in more than half of these states, a single insurer had more than half of the total enrollees,” the GAO said.

-Noel Brinkerhoff


To Learn More:

Doctors’ Association Sees Harm in Insurance Mergers (by Robert Pear, New York Times)

AMA Releases Analyses on Potential Anthem-Cigna and Aetna-Humana Mergers (Market Wire)

Medicare Advantage: A Goldmine for Health Insurance Companies (by Noel Brinkerhoff, AllGov)


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