Pending Mergers Will Harm Health Insurance Competition: AMA

September 8, 2015

The nation’s doctors say the proposed mergers among four of the nation’s largest health insurance companies would violate federal antitrust guidelines and seriously erode health insurance competition.

According to new special analyses of commercial health insurance markets issued today by the American Medical Association (AMA), the mergers would reduce competition in as many as 97 metropolitan areas within 17 states.

The report analyzes the proposed Anthem-Cigna and Aetna-Humana mergers in particular.

The mergers would also raise significant competitive concerns in additional markets, according to the report. All told, the two mergers would diminish competition in up to 154 metropolitan areas within 23 states.

“A lack of competition in health insurer markets is not in the best interests of patients or physicians,” said AMA President Steven J. Stack, M.D. “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.”

AMA did not urge federal and state regulators to disapprove the deals but did urge them to “carefully review the proposed mergers and use enforcement tools to preserve competition.”

On an individual basis, the study says that the Anthem-Cigna merger would enhance market power in 85 metropolitan areas within 13 states, including California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio and Virginia.

The merger would also raise “significant competitive concerns” in additional markets, according to the AMA. All told, the Anthem-Cigna merger would diminish competition in up to 111 metropolitan areas within all 14 states that Anthem currently operates: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.

The Aetna-Humana merger would enhance market power in 15 metropolitan areas within 7 states, including Florida, Georgia, Illinois, Kentucky, Ohio, Texas and Utah, the analysis found. This merger would also raise “significant competitive concerns” in additional markets. All told, the Aetna-Humana merger would diminish competition in up to 58 metropolitan areas within 14 states, including Arizona, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, Wisconsin and West Virginia.

AMA’s study, Competition in Health Insurance: A Comprehensive Study of U.S. Markets, is based on 2013 data from commercial enrollment in fully and self-insured plans.

The AMA says the mergers are being considered at a time when there is already an unprecedented lack of competition in most health insurance markets. In nearly two out of five metropolitan areas studied, a single health insurer has at least a 50 percent share of the commercial health insurance market. Also, according to the study, 14 states have a single health insurer with at least a 50 percent share of the commercial health insurance market and 46 states have two health insurers with at least a 50 percent share of the commercial health insurance market

The study identifies the 10 states with the least competitive commercial health insurance markets as: 1. Alabama, 2. Hawaii, 3. Delaware, 4. Michigan, 5. Alaska, 6. South Carolina, 7. Louisiana, 8. Nebraska, 9. Illinois, and 10. North Dakota.

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