Executives of two of the largest health insurance companies in the country answered questions about the potential negative fallout resulting from their merger.
California Insurance Commissioner Dave Jones quizzed executives of Aetna Inc. and Humana Inc. over the possibility of higher prices and fewer consumer choices.
Aetna announced its intention to buy Humana last summer, promising $37 billion for the company. The announcement was part of a wave of proposed mergers in the healthcare space, including a proposal by Anthem to purchase Cigna for $52 billion.
In testimony Tuesday, Jones told executives he was “skeptical” of the merger in light of past studies that have shown health insurance mergers don’t always benefit consumers.
Company representatives combatted these ideas, saying combining the two companies would allow them to lower operating costs and pass along those savings to customers. They also say they would improve the quality of healthcare and expand it.
Consumer and provider groups were also present, arguing the opposite – that the merger would lead to higher costs and reduced access, particularly for sick patients. Already, Aetna has increased their prices significantly, said Tam Ma, policy counsel with advocacy group Health Access.
“We’ve been closely watching Aetna. All these companies have had problems and could be doing better,” Ma said. “However, Aetna especially has had problems when it comes to these unreasonable rate increases. As a result, small businesses have had to pay more than they should have for care.”
Ma’s comments come a year after California’s Department of Managed Health Care criticized Aetna for raising its premiums on small businesses by 21%. That was the fourth such Aetna increase since 2013 that regulators in the state have found to be “unreasonable.”
Jones does not have the power to block the acquisitions, but he can make recommendations to the Federal Trade Commission and the Department of Justice, which will make the final decision.
