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
February 10, 2016
On February 10th, 2016, a number of major consumer groups and unions including Consumers Union, Universal Health Care Action Network of Ohio, U.S. PIRG, Consumer Federation of America, Consumer Watchdog, District Council 37-AFSCME, and Consumer Action filed comments to Ohio Lieutenant Governor/Director Mary Taylor regarding the proposed mergers of Anthem-Cigna and Aetna-Humana. The purpose of these comments was to raise concerns about the mergers and their impact on healthcare within Ohio. The parties noted a number of issues with the mergers including potential higher premiums for consumers. Here are some of the specific points raised:
Ohio law gives the Department of Insurance and the Director extensive powers to investigate insurance mergers, and to hold public hearings to access their competitive impact. The Department should hold two hearings, one for each merger.
These mergers would substantially reduce competition in Ohio in a number of different insurance products including commercial, ASO, and Medicare Advantage markets. A combination of Anthem and Cigna would create a company with just under 60% share of the ASO market, and a combination of Aetna and Humana would have a 50% market share in Medicare Advantage.
The mergers would increase costs for consumers. Studies on health insurance mergers have found significant premium increases post-merger. There is also little evidence that consumers benefit from any of the potential savings.
Individuals and organizations are worried that these acquisitions will further reduce network adequacy. This is already a significant problem within Ohio; a recent study found that 60% of all individual plans offered in Ohio use narrower networks that only include 25% or fewer of all area providers.
These acquisitions will also render it more difficult for new competitors to enter the health insurance markets. In Ohio, entry on the health exchange or within the Medicare Advantage market has been very limited, and there has been no evidence of entry on other markets.
Divestiture is not an effective remedy for restoring competition in this situation. However the Department has the power to develop its own solutions for health insurance mergers.
To see the full comments submitted to Lieutenant Governor/Director Taylor, click here.
Additionally, the Columbus Dispatch wrote an article about consumer concerns regarding the mergers and the Ohio Department of Insurance’s review.