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Major Health Insurance Mergers May Leave Consumers “Worse Off”

A number of organizations have come out against these health insurance mergers including the American Medical Association and the Coalition to Protect Patient Choice.

By Vera Gruessner

Four of the top five major payers in the nation are looking to consolidate into two combined health insurance companies. The Anthem-Cigna and Aetna-Humana health insurance mergers could lead to a complete transformation of the market and impact consumers in various ways.

Health Insurance Market

For instance, the health insurance mergers are likely to increase the cost of monthly premiums, according to the Harvard Business Review. Whether through the health insurance exchange or directly through private, commercial payers, premium costs are likely to rise in the midst of a smaller, less-competitive market.

A number of organizations have come out against these health insurance mergers including the American Medical Association, the Coalition to Protect Patient Choice, and the American Hospital Association. One major issue these organizations have with regard to more consolidation is the potential negative effect it may have on health plan affordability.

The American Medical Association is concerned that these health insurance mergers will lead to declining patient care and provider reimbursement. The American Hospital Association has stated in a letter to William Baer, the Assistant Attorney General for the United States Department of Justice Antitrust Division, that the mergers may hurt competition in the health insurance market and pose too many barriers for other payers entering the market.

Leavitt Partners also conducted a study that details which states will see the biggest payer concentration or consolidation due to the Anthem-Cigna and Aetna-Humana health insurance mergers. For instance, the states Ohio, Kansas, Alaska, and Iowa are expected to see a 60 percent increase in the Medicare Advantage concentration.

READ MORE: How Health Insurance Mergers Could Change the Payer Industry

Nonetheless, not all experts are against these mergers. Patrick Pilch, Managing Director and National Healthcare Advisory Leader of The BDO Center for Healthcare Excellence & Innovation, for example, explained that this type of consolidation should not lead to a monopoly on the market.

“I don’t envision seeing monopolies, possibly oligolopic organizations. There certainly will be market concentrations,” Pilch told “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.”

“As far as a pure monopoly, I don’t see it as I do believe there will be considerable pushback by the FTC.”

David Balto, Attorney at the Law Offices of David Balto, provided more information regarding the impacts of the health insurance mergers in an exclusive interview with

READ MORE: Payers’ Perspective: Insurance Mergers Benefit Consumers What are the biggest risks that could occur if the Anthem-Cigna and Aetna-Humana mergers take place?

David Balto: “The biggest risks that could occur are that the companies combine and use their newfound market power to raise prices, cut corners on healthcare, and just focus on making greater profits. In that case, millions of consumers would have to pay more and be worse off. These mergers could undo a lot of the progress resulting from the Affordable Care Act, which depends on robust competition in health insurance markets.” How would a decrease in competition within the health insurance industry impact consumers? Would these mergers hurt the interests of policyholders?

David Balto: “A decrease in competition within the health insurance industry would harm consumers by leading to higher premiums and overall costs, less consumer choice, and possible reduced quality of care. Competition in health insurance markets spurs companies to offer lower prices, improved products and benefits, and innovation, and these mergers will eliminate vast swaths of competition.” How would the Anthem-Cigna and Aetna-Humana mergers affect health insurance rates such as premiums and deductibles?

READ MORE: How Payer Philanthropy Can Address Social Determinants of Health

David Balto: “The Anthem-Cigna and Aetna-Humana mergers would cause health insurance rates to go up, and consumers would pay substantially more in premiums and deductibles. Past studies show that when insurers merge, there's almost always an increase in premiums.”

“Two separate economic studies of health insurance mergers found that significant premium increases for consumers post-merger. One study was of the 1999 Aetna-Prudential merger, which resulted in an additional 7 percent premium increase, and the other was of the 2008 United-Sierra merger, which resulted in a 13.7 percent premium increase in Nevada.” Do you believe that these mergers would cause a monopoly on the health insurance market? Why or why not?

David Balto: “The mergers would reduce the number of national health insurers from five to three. Essentially, you would have UnitedHealthcare, Anthem, and Aetna dominating the market. It might not be a monopoly, but it would be very close, very anticompetitive, and very bad for consumers.”

“Entry into the health insurance market has been practically non-existent and when insurers do enter they often fail. This is why these mergers are such a game changer as Associate Attorney General Bill Baer put it. If these mergers are allowed to proceed, we are likely to be stuck with only three major insurers for the indefinite future.”


Dig Deeper:

Will Health Insurance Mergers Stifle Market Competition?

Indiana, Florida Approve Anthem, Aetna Health Insurance Mergers


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