Earlier this week, we cheered the judicial decision to block Aetna’s proposed acquisition of Humana, one of the two big health insurance mega-mergers in the last year. U.S. Department of Justice had sued citing anti-trust concerns that the merger would lead to reduced competition, increased prices, and reduced quality.
In hearings earlier this year, consumer and patient groups including Health Access California, the statewide healthcare consumer advocacy coalition, raised similar questions about the proposed merger and its potential impact on California’s patients and health system. The pending Anthem-Cigna merger, also challenged in court, raises even more serious concerns.
The judge was right to block this merger, which will likely lead to reduced competition, increased prices, and more market power for insurers with a troublesome track record. Bigger is not better, and the case was clear that consumers would be negatively impacted. These mergers would give more power to Aetna, which already has low quality rating and imposes unjustified rate increases. If Aetna appeals, we hope the new leadership at the Department of Justice continues to vigorously enforce anti-trust laws, and if not, state attorneys general should continue the fight.
The case made clear that Aetna has been playing politics with Obamacare in order to get its merger approved–a tactic that has backfired on both insurers and on consumers. DOJ and regulators should also make sure that consumers are not on the hook for over $1 billion payouts in case the mergers don’t go through. If they go through or not, patients shouldn’t have to pay for these mergers in their premiums.
Here are the letters detailing the California case against these mergers:
http://www.health-access.org/consumer-protection/merger-watch.html
* Health Access letter to CDI on Aetna-Humana Merger (March 2, 2016)
* Health Access letter to DMHC on Aetna-Humana Merger (January 11, 2016)