Consolidation in the health industry often means fewer choices and competition, with no benefit for patients or the public. Health insurance companies should not be allowed to get bigger unless they get better.
In California, the top five insurers control over 90% of the market. Health Access closely monitors mergers and advocates for strong consumer protections and other conditions to ensure that these mergers are in the interest of California consumers and the health system on which we all rely.
In seeking regulatory approval for these mergers, the burden is on the merging companies to show that consumers will actually benefit in the form of lower premiums, lower out-of-pocket costs, higher quality care, and reduced health disparities.
With several past and pending insurance mega-mergers, insurers must be required to comply with strong, enforceable conditions to ensure consumers receive the benefits promised by company executives and should be required to address any existing problems relating to cost, quality, and customer service.
Health Access has commented on the following mergers by year:
- Control and Governance of Huntington Hospital and Cedars-Sinai
- Sale of Seton Medical Center/Seton Coastside from Verity Health to AHMC Healthcare, Inc.
- Sale of St. Francis Medical Center to Prime Healthcare Services, Inc.
- Joint Venture between Adventist Health and St. Joseph’s Health System
- CVS-Aetna merger: The US Department of Justice approved the merger of CVS Health and Aetna, continuing the trend of “diagonal” mergers and the further consolidation of mega-health care corporations. This was an unprecedented merger: between CVS, a major pharmacy chain and one of the nations largest independent pharmacy benefit managers (PBM), and Aetna, one of the nations largest insurers, consolidates the health industry further.
- Cigna – Express Scripts merger: Cigna Health Insurance is seeking to purchase Express Scripts, one of the nation’s largest pharmacy benefit managers (PBM). Similar to the CVS-Aetna merger, this proposed merger continues the trend of “diagonal” mergers within the health care industry.
- Anthem-Cigna Merger: Anthem, one of the largest insurers in the state and nation, acquired Cigna for $48.3 billion. This merger consolidated the national health insurance market from five major companies to just three.
- Centene-HealthNet merger: Centene acquired Health Net for $6.8 billion, allowing Centene to have a significant presence in California, gain entry into our commercial market and Covered California and drastically increase its participation in the Medi-Cal program by nearly sevenfold.
- Aetna-Humana merger: Aetna acquired Humana, a large player in the Medicare Advantage market.
- St. Joseph – Providence merger: Two major non-profit Catholic hospital chains. Health Access requested the Attorney General to ensure that all existing hospital services remain open for at least ten years, require existing reproductive health services to be maintained, and more robust charity care to meet ongoing access and affordability needs of communities served by these hospitals.
- Blue Shield of California – Care1st merger: Blue Shield, a large California-based insurer, purchased Care1st, a Medi-Cal managed care health plan in Southern California. Blue Shield’s acquisition of Care1st enabled Blue Shield to participate in California’s Medi-Cal program for the first time. In addition to our concerns about consumer protections, the Blue Shield-Care1st merger raised questions about Blue Shield’s nonprofit status and assets.
- BlueMountain Capital Management – Daughters of Charity Health System merger: Allowed BlueMountain Capital Management to operate DOCHS’ six hospitals and gain a right to purchase the chain. Health Access advocated for strong conditions to ensure the hospitals and current services remain open for ten years and charity care is maintained.