Today, there are only five national competitors -- UnitedHealth, Anthem, Cigna, Aetna and Humana. This makes health insurance markets already highly consolidated and insurance premiums are increasing because of it. State Insurance Commissioners and Congress are investigating the Anthem/Cigna and Aetna/Humana mergers. The Department of Justice and many State Attorneys General have filed suit to block the mergers, on the grounds that they are anticompetitive and will harm consumers. To see the trial documents, click here.
The CPPC believes these mergers should be challenged or patient choice will suffer. In fact, studies have shown previous health insurance mergers resulted in increases ranging from 7% (Dafny) to 13.7% (Guardado). The argument that health insurers drive down health costs has no impact on consumers -- historically, no savings are passed along to consumers. Instead, insurance costs rise for employers, individuals, and families.
STUDY: Bigger Is Not Better: Proposed Health Insurance Mergers are Likely to Harm Consumers and Taxpayers | 2016 Spiro, Calsyn, & O'Toole
STUDY: Paying a Premium on Your Premium? Consolidation in the U.S. Health Insurance Industry | 2012 Dafny, Duggan & Ramanarayanan
STUDY: The Price Effects of a Large Merger of Health Insurers: A Study of UnitedHealth-Sierra | 2013 Guardado, Emmons & Kane
Studies & White Papers
Comment letter to New York Department of Financial Services from Consumer Action, Consumers Union, Health Care for All New York, 1199 United Healthcare Workers East, and Sergeants Benevolent Association 6.22.16
Comment letter to DOJ from Senator Richard Blumenthal (D-CT), Al Franken (D-MN), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Edward Markey (D-MA), Dianne Feinstein (D-CA), and Mazie Hirono (D-HI) 6.22.16
Comment letter to Missouri Department of Insurance, Financial Institutions, and Professional Registration from Empower Missouri, Missouri Budget Project, Missouri Health Advocacy Alliance, Missouri Health Care for All, US PIRG, Consumer Action, Consumers Union, Consumer Federation of America, and SEIU Healthcare Illinois, Indiana, Missouri, and Kansas 5.9.16
Comment letter to Iowa Insurance Division from AFSCME, Consumer Action, Consumers Union, Consumer Watchdog, Consumer Federation of America, NAMI Iowa, SEIU Health IA, Iowa Citizens for Community Improvement, and League of Women Voters of Iowa 4.8.16
Comment letter to Wisconsin Office of the Commissioner of Insurance from Consumer Action, Consumers Union, Citizen Action of Wisconsin, SEIU Healthcare Wisconsin, Consumer Federation of America, US PIRG, WISPIRG, Wisconsin Jobs Now, Coalition of Wisconsin Aging Groups, Wisconsin AFL-CIO, ABC for Health, Wisconsin Federation of Nurses and Health Professionals, American Federation of State, County, and Municipal Employees, National Association of Social Workers, Wisconsin Chapter, 9to5 Association of Working Women, Wisconsin, Wisconsin Farmers Union, and National Alliance on Mental Illness Wisconsin 3.21.16
Comment letter to Illinois Department of Insurance from Consumers Union, U.S. PIRG, SEIU Healthcare Illinois and Indiana, Illinois PIRG, Health & Medicine Policy Research Group, Consumer Federation of America, Consumer Watchdog, Citizen Action of Illinois, Consumer Action, Citizen Advocacy Center, and Sergeant Shriver National Center on Poverty Law 2.23.16
Comment letter to Ohio Department of Insurance from Consumers Union, Universal Health Care Action Network of Ohio, U.S. PIRG, Consumer Federation of America, Consumer Action, Consumer Watchdog, and DC 37 AFSCME 2.10.16
Comment letter to Virginia State Corporation Commission from Consumers Union, Virginia Consumer Voices for Healthcare, Virginia Organizing, Virginia Rural Health Association, Consumer Action, the Commonwealth Institute, U.S. PIRG, Consumer Watchdog, SEIU Virginia 512, and DC 37 AFSCME 1.11.16
Comment letter to Florida Office of Insurance Regulation from Consumers Union, Florida CHAIN, Florida Rural Health Association, U.S. PIRG, Consumer Watchdog, Florida Policy Institute, Consumer Action, Florida PIRG, and 1199 SEIU United Healthcare Workers East 12.16.15
"Public Hearing on the Proposed Merger on Anthem, Inc. and Cigna Corporation"
Virginia State Corporation Commission Hearing on Anthem-Cigna 5/25/16
"In the Matter Of: Acquisition of Control of: Cigna Healthcare of Indiana"
Indiana Department of Insurance Hearing on Anthem-Cigna 4/29/16
"Hearing to Elicit Testimony and Comments Regarding the Possible Implications of the Proposed Merger between Humana, Inc. and Aetna, Inc"
California Department of Insurance Hearing on Aetna-Humana 4/27/16
"Hearing to Elicit Testimony and Comments Regarding the Possible Implications of the Proposed Merger between Anthem, Inc. and Cigna Corporation"
California Department of Insurance Hearing on Anthem-Cigna 3/29/16
"Healthy Competition? An Examination of the Proposed Health Insurance Mergers and the Consequent Impact on Competition"
House Judiciary Subcommittee Hearing 9/25/15
"Examining Consolidation in the Health Insurance Industry and its Impact on Consumers"
Senate Judiciary Subcommittee Hearing 9/22/15
"The State of Competition in the Health Care Marketplace"
House Judiciary Subcommittee Hearing 9/10/15
Congressional and State Hearings
United States v. Aetna (1999) Summary: Merger of Aetna and Prudential, two of the largest insurance companies in 1999. The competitive concerns were in overlaps between the parties' HMO and POS plans. While the most significant overlaps were found in Texas, the DOJ was also concerned about the combined "purchasing power" of the parties to "depress physicians' reimbursement rates." The merger was allowed, but the DOJ required the parties to divest HMO plans in Houston and Dallas.
United States v. UnitedHealth (2005) Summary: Merger between dominant insurers UnitedHealth and PacifiCare. Both insurers sold HMOs and PPOs in a number of different states. The DOJ's investigation focused on mainly Arizona and Colorado. Merger was consummated, but the parties were forced to divest all commercial health insurance in Tucson, AZ and Boulder, CO. United was also forced to terminate its "network access agreement with Blue Shield of California."
United States v. UnitedHealth (2008) Summary: Merger between UnitedHealth and Sierra Health. Sierra's main focus was Medicare Advantage plans, but was also the largest insurer in the State of Nevada. The combined United and Sierra would have had a 94% market share for Medicare Advantage enrollees in Las Vegas. DOJ forced the parties to only divest Sierra's Medicare Advantage portfolio.
Independence Blue Cross and Highmark's failed merger (2009) Summary: The merger of Independence and Highmark would have created an entity with 73% market share in Pennsylvania. The Pennsylvania Insurance Department opposed the merger, and in 2009 the parties dropped their plans to merge.
Blue Cross Blue Shield of Michigan and Physicians Health Plan of Mid-Michigan failed merger (2010) Summary: Blue Cross had a 70% market share while PHP had a 20% market share and controlled the largest hospital system in the state of Michigan. After the DOJ threatened to file suit to prevent the merger, the parties abandoned the transaction.
United States v. Humana (2012) Summary: Merger between Humana and Arcadian Management Services. Both parties primary business is through Medicare Advantage plans. The DOJ concluded that there were significant overlaps in five different states-- Arizona, Arkansas Louisiana, Oklahoma, and Texas. The parties were allowed to merge, but they were required to divest Arcadian's Medicare Advantage plans in 51 counties throughout the five states.
United States v. WellPoint (2012) Summary: Merger between WellPoint, acquired by Anthem in 2004, and Amerigroup. Amerigroup specialized in Medicaid Managed Care products. The DOJ allowed the parties to consummate the merger, but required Amerigroup to sell its Medicaid Managed Care plans in Northern Virginia.