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Insurance Mergers Will Not Benefit Consumers, AHA CEO Says

By Sara Heath

Health insurance mergers continue to raise antitrust concerns for the American Hospital Association (AHA). On September 10, AHA President and CEO Rick Pollack testified before the House Judiciary Committee panel regarding the association’s concerns for insurance mergers and the potential antitrust breaches insurance mergers may cause. An AHA press release states that Pollack specifically addressed the Anthem/Cigna and Aetna/Humana insurance mergers.

health insurance mergers will harm beneficiaries and providers

In his testimony, Pollack stated that it was critical that Congress and the Department of Justice examine these mergers and regulate them for any potential antitrust regulation breaches.

“We have serious concerns about [the acquisitions] and believe they merit the greatest scrutiny from both the Department of Justice’s Antitrust Division and Congress,” Pollack said.

Pollack also included in his testimony the potential issues these mergers could cause beneficiaries and providers alike.

“The market concentration threatened by the pending insurance deals is large and durable, and consumers and providers are at risk if the deals are allowed to move forward,” he said.

As reported by HealthPayerIntelligence.com, the risk for consumers could potentially include premium increases, and for providers, decreased reimbursement rates.

Pollack continued his testimony by addressing the specific concerns raised by each insurance merger. For the Anthem deal, AHA is concerned about decreased market competition, which is expected to be the cause of increased premiums.

“The Anthem/Cigna transaction threatens to reduce competition in at least 817 markets across the U.S. serving 45 million consumers,” Pollack said. “The high barriers to entry in the health insurance market exacerbate this massive concentration.”

The Aetna/Humana merger raises issues regarding Medicare Advantage (MA) plans. According to Pollack, the Aetna/Humana merger may potentially cause MA plans to become increasingly concentrated, thus increasing Aetna’s market power.

Pollack also acknowledges the reported benefits mergers could have, provided they are approved. As reported by RevCycleIntelligence.com, Aetna officials maintain that a merger with Humana could increase efficiency, and therefore drive down healthcare spending. However, Pollack warned Congress and the DoJ to be weary of those claims.

“Claims of offsetting efficiencies cannot ameliorate the competitive harm from this deal,” Pollack said. “Insurers have a dismal track record of passing any savings from an acquisition on to consumers, and there is no reason to believe that this transaction would be any different.”

This is not the first time AHA has urged federal agencies to examine and regulate these proposed mergers. In August, HealthPayerIntelligence.com reported on a letter from AHA to the DoJ regarding the antitrust concerns these mergers raise. Since then, other medical associations have followed suit, including the American Medical Association. Both organizations maintain that legal pressure from the DoJ could potentially result in both the Aetna/Humana and Anthem/Cigna mergers halting.

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