In their review of health insurance mergers, state Insurance Commissioners possess an important advantage over state Attorneys General: their merger review process is transparent and open to the public. When state Attorneys General investigate mergers, their actions are confidential and there is little opportunity for input from consumer advocates, the merging parties, or concerned citizens. State Insurance Commissioners have the power to hold hearings, propose sweeping remedies to fix anticompetitive issues resulting from the mergers, and receive input from the public.
For this reason, it is vitally important that the entire merger review process be transparent. This week, on June 7th, consumer groups and unions called for the Missouri Department of Insurance to conduct any consideration of remedies process proposed by Aetna-Humana out in the open. We think that doing so would allow the public to continue to aid the Department in making the best possible decision for Ohio consumers.
On June 7th, the Coalition to Protect Patient Choice submitted a letter praising the Department for its conduct of the merger review process so far, and urging that it continue its commitment to transparency. Specifically, the letter asked that the Department disclose any remedies for the merger that are being considered, provide a time period for the public to file comments on these remedies, review any comments filed with the Department, and to hold a hearing where the public can present their views on the remedies. The letter was submitted on behalf of AFSCME, Consumer Action, Consumers Council of Missouri, Consumers Union, Consumer Watchdog, Empower Missouri, Families USA, the Missouri Budget Project, the Missouri Health Advocacy Alliance, Missouri Health Care for All, and U.S. PIRG.
Now that Missouri has rejected the Aetna-Humana merger, the companies have the chance to propose remedies to address the Department’s concerns. They must submit these proposed solutions within thirty days. Under the antitrust standard, such solutions must fully restore competition.
There are two types of remedies generally used to resolve anticompetitive health insurance mergers: 1) companies are required to divest enough lives to restore competition, and 2) companies are required to abide by certain conduct rules designed to address specifically identified problems. In three past merger cases—Humana-Arcadian, United-Sierra, and Aetna-Prudential—both types of remedies failed to restore competition and protect consumers. It is unlikely that remedies will succeed in restoring competition for this merger, which is much larger and more complicated than the previous examples.
The Missouri Department of Insurance should carefully consider whether proposed remedies for the Aetna-Humana will really achieve their goals and protect consumers, and ensure that the remedies process is open and provides opportunities for public comments. Continuing to provide an open process will aid the Department in making a well informed decision that best