- As previously reported, the Department of Justice (DOJ) has announced that it will be blocking the Anthem-Cigna and Aetna-Humana insurance mergers due to the potential harm it may bring to consumers along with employers, hospitals and providers. However, a number of press releases from Anthem, Cigna, and Aetna state the opposite of the DOJ’s position and declare that the insurance mergers would actually benefit consumers.
Aetna’s press release statement outlined how these health insurance mergers may benefit seniors who are seeking less costly Medicare Advantage plans. Essentially, the company alleges that there will be more Medicare options in more regions across the country if these insurance mergers came to fruition. Aetna and Humana also promise to have the largest number of quality Medicare Advantage plans rated four stars and higher.
Additionally, the company stated that this merger will bring a decrease in waste and, thereby, a reduction in costs for their health plan members. Additionally, the Aetna press release states that the health insurance merger would lead to innovation and bring new products and tools to consumers around the nation.
The Anthem-Cigna health insurance merger also disagrees with the position taken by the Department of Justice. Anthem highlighted in a press release that the DOJ has taken “an unfortunate and misguided step” when it comes to ensuring that American citizens have the opportunity to purchase affordable health plans and access medical care.
Having access to healthcare coverage reduces healthcare costs for consumers, the release states. Anthem alleges that the Department of Justice has used “flawed” logic and “misunderstanding” when it comes to blocking these health insurance mergers.
Anthem positions itself as committed to consumer interests and increasing access to affordable healthcare benefits including “choice, quality and affordability.” At this point in time, Anthem is both poised to take on the Department of Justice in court as well as consider settling claims out of the courtroom. The health payer is looking to complete the merger in order to bring Americans “high quality healthcare services with greater value at less cost.”
According to a press release from Cigna, this health payer is taking part in looking through its contract to better understand its obligations going forward with regard to the lawsuit blocking the insurance merger. In fact, the payer stated that the deal will likely not close in 2016 and may only close in 2017 “if at all.”
“Since announcing the transaction, Cigna has remained focused on delivering value to our clients and customers, building on our track record of strong financial results and growing our businesses in the U.S. and abroad,” according to the press release.
“Cigna has remained strong by continuing to invest in innovative solutions to advance the goals of better health, affordability and personalized experience for our clients and customers and continuing to advance innovative approaches to care management, including expansion in collaborative value-based care arrangements with healthcare professionals across the care delivery spectrum, and designing effective health, wellness and engagement programs for our customers.”
The AMA’s stance
However, on the other side of the equation, the American Medical Association (AMA) has come out favoring the lawsuits being planned by the Department of Justice in order to keep these insurance mergers from taking place. The AMA President Andrew W. Gurman, M.D., stated in a press release that his organization supports the DOJ decision to protect both consumers and physicians from the anticompetitive stance these insurance mergers pose.
Gurman went on to say that patients receive better coverage options in a market that supports competition and consumer choice. Reducing the top five national health plan carriers to a mere three would drastically undercut much-needed competition in the health insurance market.
The AMA stands behind the Department of Justice decision to challenge these health insurance mergers. Essentially, the AMA feels that these insurance mergers would hurt patients and the healthcare market as a whole.
However, in an interview from December 2015, Patrick Pilch, Managing Director and National Healthcare Advisory Leader of The BDO Center for Healthcare Excellence & Innovation, told HealthPayerIntelligence.com that these health insurance mergers would not lead to a monopoly on the market.
“I don’t envision seeing monopolies, possibly oligopolic organizations. 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,” said Pilch. “As far as a pure monopoly, I don’t see it as I do believe there will be considerable pushback by the FTC.”
When it comes to how these insurance mergers would affect consumers, Pilch explained, “I think you could run into an issue with respect to networks and in the narrowing of networks. That’s the challenge. This gets back to an earlier thought - the thought is that networks could reduce administrative costs. On the commercial side, I believe that is possible. There’s more functionality and scalability in terms of administration. Insurers could pursue more value-based payment arrangements.”
“However, where the transaction is limited to cost savings not associated with efficiencies but rather access curbing, the consumer is limited by his or her choice – this is not a significant benefit to the consumer. That’s a direct effect right there.”
While the health payers who’ve negotiated these insurance mergers allege that it will benefit consumers around the country, the Department of Justice, the AMA, and various other healthcare organizations have stood on the opposite side and claimed that these acquisitions would harm patients and the insurance market.