Cutting the number of major U.S. health insurers from five to three through a pair of blockbuster mergers would erode competition in a way that is “not in the best interests of patients or physicians,” a top doctors’ group said Tuesday.
The American Medical Association said the proposed mergers, Aetna with Humana and Anthem with Cigna, exceed federal antitrust guidelines meant to promote healthy competition in the marketplace, meaning consumers could see higher prices or worse service from the top health insurers.
All told, the mergers among four of the biggest five insurers — UnitedHealth Group is the other — would decrease competition in more than 150 metropolitan areas in 23 states, the AMA concluded.
“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,” association President Steven J. Stack said. “Given these factors, AMA is urging federal and state regulators to carefully review the proposed mergers and use enforcement tools to preserve competition.”
Members of Congress have sounded the alarm over increasing consolidation in the health care industry, with Republicans blaming Obamacare for the industry’s moves to combine and cut costs.
The health insurance industry’s top lobbying group hit back at the AMA on Tuesday, saying the association used limited data and that consolidation among hospitals and other providers is to blame for rising costs on consumers and employers.
“This latest analysis derives from the same fatally flawed study that has consistently been debunked by leading health care economists. Families and employers in every state have multiple choices of both insurance plans and types of coverage,” America’s Health Insurance Plans (AHIP) said in a statement.
While the Justice Department and Federal Trade Commission review the proposed deals, Congress is looking into the spate of merger talk.
On Thursday, the House Judiciary Committee will hold its first in a series of hearings this fall on competition in the health care industry and what role Obamacare has played in recent consolidation.
Earlier this summer, Aetna’s announced purchase of Louisville-based Humana quickly caught the attention of the Senate’s top Republican.
“This morning’s announcement, as I predicted during the debate five years ago, is the inevitable result of Obamacare’s push toward consolidation as doctors, hospitals, and insurers merge in response to an ever-growing government,” Senate Majority Leader Mitch McConnell of Kentucky said July 3.
The moves aren’t an everyday concern for most Americans, however. Last month, Kaiser Family Foundation released a poll saying 22 percent of those surveyed had been following news of Anthem-Cigna deal.
In its analyses, AMA said the merger Aetna-Humana deal would also erode competition in 14 states: Arizona, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, Wisconsin and West Virginia.
An Aetna spokeswoman, Cynthia B. Michener, said the AMA report focused on competition in the commercial marketplace, “which would not meaningfully change following an Aetna/Humana combination given Humana’s very small commercial business.”
Rather, she said, Humana focuses on Medicare, where consumers can choose from an average of 18 privately run Medicare Advantage plans or the traditional fee-for-service programs.
AMA said the Anthem-Cigna merger would reduce competition in more than 100 metropolitan areas in 14 of the states where it operates: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.
For its part, Anthem said the proposed merger would be a net positive for consumers that allows the companies to operate more efficiently.
“Together, Anthem and Cigna, who have limited overlap in a highly competitive industry, will be in a better position to improve consumer choice and quality,” Anthem spokeswoman Kristin E. Binns said Tuesday. “Most of all, we will be better able to lead the transition to value-based care that will reduce costs while improving health outcomes.”