SOURCE: American Medical Association

American Medical Association

September 21, 2016 11:20 ET

New AMA Analyses Support Blocking the Anthem-Cigna and Aetna-Humana Mergers

Competition and Choice Hang in Balance as the Health Insurance Industry Slides Toward Corporate Monopolies

CHICAGO, IL--(Marketwired - September 21, 2016) - New data presented today show the nation needs more competition in health insurance markets, and supports antitrust efforts to block unprecedented mergers among four of the nation's biggest health insurance companies. Left unopposed, Anthem's acquisition of Cigna and Aetna's takeover of Humana would collectively quash competition in insurance markets across 24 states according to newly updated market analyses released by the American Medical Association (AMA).

"The AMA analyses show that Anthem-Cigna and Aetna-Humana mergers would significantly compromise market competition in the health insurance industry and threaten health care access, quality and affordability," said AMA President Andrew W. Gurman, M.D. "With existing competition in health insurance markets already at alarmingly low levels, federal and state antitrust officials have powerful reasons to block harmful mergers and foster a more competitive marketplace that will operate in patients' best interests."

The U.S. Department of Justice (DOJ) and numerous state attorneys general joined forces in July to block the mega-merger deals. The AMA has applauded this strong response by federal and state officials to protect patients from a health insurance system dominated by a few corporate Goliaths. The AMA analyses are intended to help federal and state regulators in their continuing effort to identify markets where mergers may cause competitive harm to the local health system.

On an individual basis, the Anthem-Cigna merger would diminish competition in 121 metropolitan areas located throughout the 14 states where Anthem is licensed to provide commercial coverage, including: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin. Nine of these 14 states are working to block the Anthem-Cigna merger. States that have yet to take an antitrust position on the merger include: Indiana, Kentucky, Nevada, Ohio and Wisconsin.

A closer look at the Aetna-Humana merger shows the deal would diminish competition in 57 metropolitan areas located throughout 15 states, including: Arizona, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, Wisconsin and West Virginia. Four of these 15 states are working to block the Aetna-Humana merger. States that have yet to take an antitrust position on the merger include: Arizona, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas, Utah, West Virginia and Wisconsin.

"High-quality medical care is only possible if regulators enforce antitrust laws to prohibit harmful health insurance mergers that run counter to patients' best interests," said Dr. Gurman. "It is clear that more can be done in certain states where the attorneys general have not yet taken a strong stance against the mergers. To ensure patients are better served by dynamic and competitive health insurance markets, the AMA will work to expand the bi-partisan group of state attorneys general that has joined the Justice Department to block the massive deals."

The anticompetitive impact of the potential mergers was assessed using data from the newly released 2016 edition of AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets, which offers the largest and most complete picture of competition in health insurance markets for 388 metropolitan areas, as well as all 50 states and the District of Columbia. The study is based on 2014 data captured from commercial enrollment in fully and self-insured health maintenance organizations (HMO), preferred provider organizations (PPO) and point-of-service (POS) plans, and includes participation in consumer-driven health plans. For the first time, the study also includes newly available data from the health insurance marketplaces, also known as exchanges.

The study assesses competition in the commercial health insurance markets, as well as separately examining competition in the HMO, PPO, POS, and exchange product markets.

The prospect of reducing five national health insurance carriers to just three should be viewed in the context of the unprecedented lack of competition that already exists in most health insurance markets. According to the AMA's latest study:

  • A significant absence of health insurer competition was found in 71 percent of the metropolitan areas studied. These markets are rated "highly concentrated," based on federal guidelines used to assess the degree of competition in a given market.
  • In 40 percent of the metropolitan areas studied, a single health insurer had at least a 50-percent share of the commercial health insurance market.
  • Fourteen states had a single health insurer with at least a 50-percent share of the commercial health insurance market - Alabama, Delaware, Hawaii, Illinois, Indiana, Louisiana, Michigan, Nebraska, North Carolina, North Dakota, Rhode Island, South Carolina, Vermont and Wyoming.

Competition in Health Insurance: A Comprehensive Study of U.S. Markets is free to AMA members. The study is also available to non-members. To order a copy, visit the online AMA Store, or call (800) 621-8335 and mention item number OP427116.

Editor's Note: Credentialed members of the media can obtain a free copy of the AMA's newest study on competition in the nation's health insurance industry by contacting AMA Media & Editorial at: (312) 464-4430.

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About the AMA
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