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April 08, 2016

On April 8th, 2016, a coalition of major consumer groups and unions composed of AFSCME, Consumer Action, Consumers Union, Consumer Watchdog, Consumer Federation of America, NAMI Iowa, SEIU Healthcare IA, Iowa Citizens for Community Improvement, and the League of Women Voters of Iowa filed comments to Iowa Insurance Commissioner Nick Gerhart regarding the proposed merger of Aetna-Humana. The purpose of these comments was to raise concerns about the merger and its impact on healthcare in Iowa and to urge the Divison to hold a public hearing to evaluate the merger. Here are a number of specific points raised:



  • The Iowa Insurance Division (IID) should consider holding a public hearing on the Aetna-Humana merger and take action to protect consumers. This acquisition will have a substantial harmful impact on Iowa consumers and health insurance markets. If IID decides that a merger is not in the public interest, it has the power to disapprove the merger.


  • The merger will put an end to significant existing and future competition between Aetna and Humana in the Medicare Advantage (MA) market. In Iowa, a combined Aetna-Humana company would possess 64% of the MA market share. Competition between Aetna and Humana would benefit consumers; studies show the competition between the two companies lowers annual premiums.


  • Iowa consumers need assurances that improper business practices by Humana will be addressed if it is acquired by Aetna. Recently the Center for Medicare and Medicaid Studies fined Humana $3.1 million for inappropriately delaying or denying care to elderly patients.


  • The merger will lead to higher health care costs and insurance premiums. Iowa insurance premiums continue to rise—just last year the IID approved double digit rate increases, including a stunning 28.7% for Wellmark. When insurance companies merge, there is almost always an increase in premiums.


  • Proponents of the merger claim that this deal will lead to substantial efficiencies. However they have offered little detail about these supposed savings, and there is no evidence or scholarly  studies showing that insurance mergers lead to savings for consumers.


  • Divestitures are a practical remedy for health insurance mergers; they are ineffective and usually fail to restore competition. However, IID can develop additional remedies to protect consumers, such as requiring rate control or premium stability, requiring that plan benefits and options be maintained, improving access to providers, or other regulatory steps.



To see the full comments submitted to Commissioner Gerhart please click here.  


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