The Coalition to
Protect Patient Choice
of David Balto
Competitive healthcare is healthcare with choices
Advocacy on consumer healthcare competition issues aimed at lowering prescription drug costs
March 03, 2016
On March 3rd, 2016, three major consumer groups, Consumers Union, U.S. PIRG, and Consumer Action, filed comments to Delaware Deputy Attorney General Kathleen Makowski regarding the proposed merger of Anthem-Cigna. The purpose of these comments was to raise concerns about the merger and its impact on healthcare within Delaware, and to request the ability to designate a witness at the March 10th public hearing on the merger. The parties noted a number of issues with the merger including reduced competition. Here are some of the specific points raised:
The consumer groups requested the ability to designate a witness at the March 10th public hearing before the Delaware Department of Insurance to address concerns raised by the acquisition. They are especially concerned about the merger’s potential impact on the licensing arrangement of the Blue Cross Blue Shield Association.
Delaware’s health insurance markets are comparatively weak and this merger will make the situation worse; in 2013 the three largest commercial insurers for individual, small group, and large group markets enrolled 92% of Delawareans. The most dominant insurer is Highmark Blue Cross Blue Shield, with 53% market share, and which is also the dominant insurer on the exchange. This merger would enhance "fortress Highmark" by eliminating important rivalry from Cigna.
The Blue Cross association has a series of rules that prevent Blues plans in other states from competing against a state's incumbent Blue plan. No other Blue mark holder is allowed to compete with Highmark in Delaware. Anthem is prohibited from competing against Highmark and if it acquires Cigna it will be forced to withdraw Cigna's products from Delaware. Thousands of consumers in Delaware will have less choice and be forced to pay higher premiums.
The Delaware Department of Insurance is empowered to develop remedies to effectively prevent the harm this merger would cause to competition and consumers. It should consider requiring Anthem to receive permission to waive Blue Cross Blue Shield’s rules in Delaware, especially the market allocation rule.
To see the full comments and the letter from the American Hospital Association submitted to Deputy Attorney General Makowski, click here.
Delaware held a hearing on the Anthem-Cigna merger on June 7th, 2016.