AMA Calls on DOJ To Block Proposed Health Insurer Mergers

California Healthline, Thursday, November 12, 2015

On Wednesday, the American Medical Association called on antitrust regulators to block proposed mergers between Anthem and Cigna, as well as Aetna and Humana, The Hill reports (Sullivan, The Hill, 11/11).

Background

In July, Anthem announced that it agreed to acquire Cigna for $48.4 billion. The combined company would have about 53 million customers, which would make it the nation’s largest insurer in terms of enrollment.

Also in July, Aetna announced it reached a $37 billion deal to purchase Humana, which could make Aetna the nation’s second-largest insurer. Shareholders from Aetna and Humana approved the deal last month (California Healthline, 9/24).

Federal regulators must approve the proposals, and antitrust experts say the Department of Justice and state attorneys general are likely to scrutinize them closely. DOJ will review the proposals over the next year or longer (California Healthline, 10/20).

The insurers argue the mergers will bolster competition (California Healthline, 9/24).

AMA’s Concerns

AMA in September urged regulators to “carefully review” the proposed deals and released an analysis that found the mergers would reduce competition in up to 154 metropolitan areas across 23 states (AMA release, 9/8). AMA at that time did not formally call for federal regulators to block the deals.

On Wednesday, AMA in a letter to Assistant Attorney General William Baer, head of DOJ’s antitrust division, said the mergers would decrease competition and have a negative effect on consumers. AMA CEO James Madara wrote, “Fostering competition, not consolidation, benefits American consumers through lower prices, better quality, and greater choice” (Bloomberg Business, 11/11).

Madara argued that the mergers would allow insurers to lower provider payments, which “could harm the quality of health care delivered to consumers.” He noted that reduced payments might lead physicians to spend less time with patients or cut back investments in new technologies (The Hill, 11/11).

Madara concluded, “Any remedy short of blocking the mergers would not adequately protect consumers” (Tracer, AMA letter, 11/11).

Source: California Healthline, Thursday, November 12, 2015