Proposed insurance consolidations raise concerns

Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana have “the very real potential” to substantially reduce competition and the insurers’ willingness to partner with health care providers and consumers in transforming care, the AHA told the Department of Justice in an Aug. 5 letter.

“These transactions will combine four of the five national health insurance companies, with effectively no possibility that existing firms could replicate their size and scope,” noted Mindy Hatton, the AHA’s senior vice president and general counsel.

She said the proposed deals “merit the closest scrutiny to determine whether remedies, such as divestitures, have any chance of ameliorating the enduring damage they could do as a result of the loss of such significant competition.”

The letter details the potential anticompetitive impact on access, affordability and innovation that Anthem’s proposed acquisition of Cigna presents, noting that AHA will address Aetna’s proposed acquisition of Humana in a separate letter because the size and scope of the proposed acquisitions is so enormous.

In an Aug.6 AHASTAT blogpost, AHA Executive Vice President Rick Pollack said that “the insurance industry already is enormously concentrated and has a dismal track record of passing savings on to consumers.” And he noted that “independent research on previous insurance market consolidation shows that insurers do not share savings with their customers.”