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January 11, 2016

On January 11th, 2016, Consumer Action, a California based non-profit consumer focused organization, filed a comment to Director Shelly Rouillard of the California Department of Managed Health Care regarding the proposed merger of Aetna and Humana.  The purpose of this comment was to raise concerns about the merger and its impact on health insurance competition in California. Here are a number of specific points raised:



  • California’s health insurance markets are highly concentrated. In 2014, the three largest commercial insurers enrolled 84% of all Californians.


  • There is a direct correlation between increased health insurer concentration and higher premiums. From 2011-2016 premiums in California have gone up on average 8.5% per year.


  • Current rules and regulations will not prevent insurers from raising consumer costs—the medical loss ratio is not strong enough protection for consumers.


  • There are also concerns that the merger will reduce network adequacy. Already 75% of all California’s individual plans use narrower networks that include only 25% or fewer of all area providers. 


  • Health insurance merger efficiencies are unlikely in California, and there is even evidence that shows concentrated insurance markets have less innovative insurance products.



To see the comments submitted to the California Department of Managed Health Care, please click here.

On June 20th, the California Department of Managed Health Care approved the Aetna-Humana merger. To see the press release, please click here. To see the conditions required for approving the merger, please click here

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