AMA Calls For Regulatory Review Of Health Insurance Mergers

The combined impact of proposed mergers among four of the nation’s largest health insurance companies would exceed federal antitrust guidelines designed to preserve competition in as many as 97 metropolitan areas within 17 states, according to new special report on commercial health insurance markets issued recently by the American Medical Association (AMA).

The proposed $54 billion Anthem-Cigna and the smaller $34 billion Aetna-Humana mergers would also raise significant competitive concerns in additional markets, the recently released AMA report says. All told, the two mergers would diminish competition in up to 154 metropolitan areas within 23 states.

“A lack of competition in health insurer markets is not in the best interests of patients or physicians,” said AMA President Steven J. Stack, M.D. “If a health insurer merger is likely to erode competition, employers and patients may be charged higher than competitive premiums, and physicians may be pressured to accept unfair terms that undermine their role as patient advocates and their ability to provide high-quality care. Given these factors, AMA is urging federal and state regulators to carefully review the proposed mergers and use enforcement tools to preserve competition.”

On an individual basis, the Anthem-Cigna merger would enhance market power in 85 metropolitan areas within 13 states, including California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio and Virginia, the AMA report concludes.

The merger would also raise significant competitive concerns in additional markets. All told, the Anthem-Cigna merger would diminish competition in up to 111 metropolitan areas within all 14 states that Anthem currently operates, including California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.

Concerning the Aetna-Humana merger, the AMA report shows it would enhance market power in 15 metropolitan areas within 7 states, including Florida, Georgia, Illinois, Kentucky, Ohio, Texas and Utah. The merger would also raise significant competitive concerns in additional markets.

All told, the Aetna-Humana merger would diminish competition in up to 58 metropolitan areas within 14 states, including Arizona, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, Wisconsin and West Virginia.

The AMA findings are based on an in-depth analysis of data used to create the newly released 2015 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 2013 data captured from commercial enrollment in fully and self-insured plans, and includes participation in consumer-driven health plans.