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Coalition to Protect Patient Choice Holds Capitol Hill Briefing on Health Insurance Mergers

On March 16, the Coalition to Protect Patient Choice (CPPC) held a briefing on Capitol Hill regarding the Anthem-Cigna and Aetna-Humana health insurance mergers. The panelists included Topher Spiro, Vice President of Health Policy at the Center for American Progress, Diana Moss, President of the American Antitrust Institute, Lynn Quincy, Director of Health Care Value Hub at Consumers of Union, and antitrust lawyer David Balto. Over sixty people attended the briefing. In their remarks, the panelists examined the mergers and their likely impact on consumers, health care providers, and health insurance markets, and urged the Department of Justice to block the mergers.

The primary arguments were simple: the proposed Anthem-Cigna and Aetna-Humana mergers would be irreversible once they were completed, they would permanently reduce competition and consumer choice in the health insurance markets, and past health insurance mergers resulted in higher health care costs and higher insurance premiums for consumers. Lynn Quincy began by providing basic information about the health insurance industry and how there has been a frenzy of health insurance mergers over the past decade. She emphasized that bigger does not necessarily mean better: consumers are looking for affordable premiums, transparent rate justifications, reliable provider directories, and adequate networks, among other goals. Mergers of large health insurance companies lead to none of those goals. In fact, they frequently lower benefits to consumers, resulting in higher premiums, less incentive to innovate, and being less responsive to rate reviews.

Diana Moss followed up with the observation that these acquisitions would reduce the number of the number of national health insurers from five to three, and urged everyone to think about these mergers in a broader context. These deals would ensure that there will be only two or three competitors in each health insurance market, and they raise competitive issues. Consumer groups and unions have expressed concerns about the elimination of competition, high health care costs, and even reduced quality of care. She also noted that bargaining is not a good substitute for competition, and that our whole health care supply chain is in danger of being reduced to a few major suppliers, which is not a welcome trend.

Topher Spiro observed that the companies Aetna and Humana currently directly compete for Medicare Advantage customers in over 500 counties. Just three years ago, in 2012, they only competed in 82 counties. He also argued that divestitures are an ineffective remedy for health insurance mergers. In the past, divestitures frequently failed to restore competition, and companies exited the affected markets, leading to reduced competition and premium increases. Additionally, these divestitures were small and straightforward compared to the divestitures that would be required to preserve competition for these mergers, meaning they would be very unlikely to work.

The audience members concluded with a few questions, and most of them expressed concern about the situation. Last week at the Senate Antitrust Oversight Hearing, Senators from both parties agreed that far more must be done to block unfair mergers and prevent them from harming consumers. The panelists at this event laid out a more detailed case for the negative impact of these mergers, and why antitrust authorities should act in the best interests of consumers, healthcare providers, and insurance markets and block them.

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