AHA to DOJ: Anthem-Cigna merger also threatens self-insured market

The AHA this week urged the Department of Justice to reject claims that the proposed merger of Anthem and Cigna would not reduce competition in the Administrative Services Only – or self-insured – market. “It is our understanding that Anthem and Cigna are arguing to the Department of Justice that, as a general matter, combining ASO plans presents relatively low antitrust risk, even in highly concentrated markets, because health plans merely ‘pass through’ provider costs to customers and, therefore, do not have the opportunity to earn a profit on them, or on the financial risk associated with the customer’s medical claims,” wrote Melinda Reid Hatton, AHA senior vice president and general counsel. “At the very least, this argument strains credibility. Any notion that ASO health insurance contracts are somehow immune from the standard principles of supply and demand is inconsistent with market realties, basic economics and common sense.” Noting that Anthem and Cigna’s ASO contracts generate billions of dollars in fees every year, AHA said the proposed merger would enable the insurers to increase these fees and other charges substantially and reduce access to provider networks for ASO plans. “For these and the many other reasons detailed in our correspondence with the Department, we urge you to challenge the deal,” AHA wrote.