- The major health payer Aetna has recently withdrawn its membership from one of the nation’s largest insurance lobbying group America’s Health Insurance Plans (AHIP). The lobbying group is now under new leadership. Former administrator of CMS Marilyn Tavenner is now representing AHIP.
Former President and CEO of AHIP Karen Ignagni stepped down from her leadership position in May 2015 after 22-year run. Ignagni is now working as President and CEO of EmblemHealth, a health payer based in New York.
“We will continue to partner with groups that are working, as we are, toward expanding access to high-quality, affordable healthcare,” Aetna spokesperson Cynthia Michener said in a statement.
Even though America’s Health Insurance Plans has lost a major member of its arsenal, it is still committed to its mission. Nonetheless, some claim that the lobbying group is setting its sights on advancing the provisions of the Obama administration’s Patient Protection and Affordable Care Act.
Last summer, the health insurer UnitedHealth Group announced that it was leaving AHIP as well and withdrew its membership. The future will show whether the moves made by Aetna and UnitedHealth Group will affect the lobbying group’s power and membership.
“UnitedHealth Group believes the interest of our company and the customers we serve are no longer best represented by AHIP and accordingly are ending our membership effective June 30,” Matt Stearns, spokesman for UnitedHealth Group, said in a public statement when the insurer concluded its relationship with the lobbying group.
“AHIP has set forth a strategy and direction it feels best serves a membership profile and need that does not fit UnitedHealth Group and our diversified portfolio.”
AHIP will likely be left with only has one major insurer as part of its membership due to the UnitedHealth Group leaving along with the potential mergers taking place between Aetna and Humana as well as Anthem and Cigna.
One lobbying group that both Aetna and UnitedHealth Group have remained in partnership with is the Medicaid Health Plans of America. This organization represents many of the same insurers that are members of America’s Health Insurance Plans.
“Aetna has decided not to renew our AHIP membership for 2016,” Aetna spokeswoman Cynthia Michener told The Hill. “We will continue to partner with groups that are working, as we are, toward expanding access to high-quality, affordable health care.”
Aetna is currently the third largest health insurance company in the nation and its decision to leave the lobbying group comes as a blow to the membership. When UnitedHealth Group left AHIP, the spokesperson for the company stated that the needs of the insurer as well as its consumers were “no longer best represented by AHIP,” The Hill reports.
The reason behind Aetna leaving America’s Health Insurance Plans is due to the additional attorneys and lobbyists that the health payer has hired in anticipation of the struggles behind its merger with Humana.
Health insurance merger implications
There has been wide speculation in the health payer industry as to whether the mergers between four of the largest insurers in the country will lead to a general monopoly of the market.
In an interview, Patrick Pilch, Managing Director and National Healthcare Advisory Leader of The BDO Center for Healthcare Excellence & Innovation, spoke about the potential implications of these health insurance mergers. Pilch’s perspective is that large mergers within the health payer industry will not lead to monopolies.
“I don’t envision seeing monopolies, possibly oligolopic organizations,” Pilch began. “There certainly will be market concentrations. I do know the Department of Justice looks at the Herfindahl–Hirschman Index “HHI” as a means to calculate market share for respective participants and where the calibration and concentration is that causes them concern.”
The DOJ considers a calculation calculations of in excess of certain thresholds indicates market concentration definition which informs actions to be pursued by the DOJ. I think, by virtue of that, we will see some peel back of plans that have certain geographic market share concentrations. That’s where that will be the offset for a potential for monopolistic organizations.”
“One could make the argument that these payer mergers will lead to single payer or maybe a utility so that it becomes regulated. I believe that this will be a long way away. Through the FTC, regulators are looking at where the measures of concentration are and how they play there.”
“As far as a pure monopoly, I don’t see it as I do believe there will be considerable pushback by the FTC,” Pilch clarified.
When discussing what issues the other health payers should be prepared for when it comes to mergers and acqusitions, the Managing Director explained that market analysis concentration should be completed while research behind population and changing demographics is vital.
“If you understand customer needs, your administrative costs and platform can be designed to be more efficient in terms of services and processing claims. This is important as we move toward the ratings seen in Medicare Advantage plans where consumer, member and patient satisfaction are foundational to the rating methodology. This is maturing to commercial plans, skilled nursing facilities, and hospitals,” Pilch continued.
“The quality of access to the network is going to make a determination of what type of consumers you can offer to and what costs of administration of those services would be,” Pilch concluded. “In terms of administrative costs, I think contextually there has to be a future state vision of what this post-transaction organization will look like.”