A sweeping coalition of consumer groups and unions submitted comments to Wisconsin Commissioner of Insurance Ted Nickel concerning the proposed Aetna-Humana merger. In these comments, the organizations commended the Office of the Commissioner of Insurance (OCI) for holding a public hearing on the merger and expressed grave concerns about the merger and its impact on consumers, healthcare providers, and health insurance markets.
The groups that signed onto the comment were 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 (AFSCME), National Association of Social Workers, Wisconsin Chapter, 9to5 Association of Working Women, Wisconsin, Wisconsin Farmers Union, and National Alliance on Mental Illness Wisconsin. This unprecedented coalition of nonprofits, federations, and unions demonstrated that the concern about the Aetna-Humana’s potential harmful effects is widespread and not limited to any particular group.
Under Wisconsin law, the Commissioner, after a public hearing, has the power to disapprove any insurance merger that is illegal or against the interests of the insureds. The Commissioner can also reject an acquisition if there is substantial evidence that it will greatly reduce competition in any area of insurance or tend to create a monopoly. In the comments, the groups expressed concern that the merger would reduce competition in the administrative-services-only (ASO) market, Medicare Part D, and the Medicare Advantage market. They further observed that in the past Aetna and Humana have violated consumer protections, and requested that these abuses be rectified. Additionally, the mergers will likely lead to higher premiums, raise concerns over network adequacy, and not benefit consumers.
The organizations concluded with the observation that divestitures, traditionally the favored remedy of the Department of Justice, are not usually successful in restoring competition. However, the Wisconsin Insurance Commissioner can develop additional remedies for a health insurance merger. For example, in the 2008 acquisition of Sierra Health by UnitedHealth, the Nevada Insurance Commissioner required additional remedies.
If OCI allows the Aetna-Humana merger to proceed, they should take steps to protect consumers. Some possible solutions include requiring premium stability or increased rate control post-merger, requiring the merged company to maintain plan benefits and options, improving provider access, ensuring consumer access to adequate networks is preserved and strengthened, requiring the merged company to participate in the Wisconsin Exchange, and requiring the merged company pass along any cost savings to consumers, in the form of reduced premiums and deductibles.
Consumer groups and unions have submitted comments expressing concerns about the health insurance mergers in Florida, Virginia, California, Ohio, Illinois, Delaware, and now Wisconsin. With California, Wisconsin, and Virginia having scheduled hearings on the mergers, it is all the more important for those concerned to make their voices heard.