The nation’s healthcare providers are speaking out against proposed transactions that would take the so-called “Big 5” companies in health insurance down to the “Big 3.”
In a new study released Tuesday, the American Medical Association suggested that the planned acquisition of Humana by Aetna, as well as Anthem’s proposal to acquire Cigna, would result in an insurance market dominated by few players and high consumer premiums.
It even suggested the transactions could violate federal antitrust guidelines which prohibit against mergers that “create, enhance or entrench market power,” thus leading to firms raising prices and reducing output.
By the AMA’s estimation, proposed mergers could reduce competition in 23 states and 154 metropolitan areas.
In light of this evidence, AMA President Steven J. Stack, president of the AMA, asked the Obama administration to carefully review the planned mergers, saying “a lack of competition in health insurer markets is not in the best interests of patients or physicians.”
The study suggests that states with the least competitive insurance markets will have the most to lose, including Alabama, Hawaii, Delaware, Michigan, Alaska, South Carolina, Louisiana, Nebraska, Illinois and North Dakota.
The research comes just weeks after the American Hospital Association sent a letter to the Justice Department saying the Aetna-Humana deal “threatens serious and widespread competitive harm” to consumers, particularly Medicare beneficiaries.
According to the AHA, more than 30% of the nation’s 55 million Medicare beneficiaries have enrolled in private Medicare Advantage plans. As the two insurers represent a high proportion of these individuals, a merger would mean less market choice.
Already, enrollment in health plans was concentrated among the three largest insurers in most states. The three largest carriers claimed at least 80% of enrollment in 37 states, and in more than half, a single insurer boasted more than half of the total enrollees.
While insurers say the transactions promote synergy and cost savings, the AMA and AHA say there is no guarantee the companies will pass on savings to consumers.
