Forty Three Medical, Consumer, and Advocacy Organizations Urge DOJ to Protect Consumers From Merger Harm

June 29, 2016

 

 

 

Forty-three state and national organizations have signed a letter to the Department of Justice expressing grave concerns about the state review of the Anthem-Cigna and Aetna-Humana mergers and urging DOJ to protect consumers from any harm resulting from the deals.

 

The signatories observe that these health insurance mergers will greatly impact health insurance markets across the nation, and will lead to increased consolidation, reduced competition, and higher premiums and healthcare costs. They also express frustration with how the merger review process is being conducted at the state level. Some State Insurance Commissioners have approved the mergers in secret, without public hearings or opportunities for input, and despite grave competitive problems. Consumer attempts to voice their concerns have been met with evasions and silence. The groups also hoped that more states would be holding public hearings on the mergers, and note that some states are not reviewing the mergers at all. Finally, Connecticut Insurance Commissioner Katharine Wade is mired in controversy; the Connecticut Ethics Board is investigating whether she should recuse herself from the Anthem-Cigna review because of a potential conflict of interest.

 

The concerns raised in this letter are well-founded. Florida, California, Delaware, Indiana, Missouri, Virginia, and Wisconsin have all held public hearings on one or both of these acquisitions. In California and Missouri, the Insurance Commissioners held lengthy hearings, carefully reviewed the transactions, and issued thorough, well-crafted opinions against the mergers. But other states, such as Kentucky and Ohio, have not held public hearings and have approved these mergers in a secretive manner, without even announcements or adequate justifications of their decisions. State Insurance Commissioners possess broad power to publicly investigate mergers, determine whether they are anticompetitive or not in the public interest, and construct remedies to protect consumers. However, some Insurance Commissioners have not used that authority despite growing alarm at the effects of reducing the five largest health insurers into three mega-insurers.

The letter concludes that at the state level, “we see a review process that too often lacks integrity and transparency and prevents public confidence in the decisions that have been or will be made.” It concludes by calling on DOJ to use “its expertise and enforcement power to protect people from the harm these mergers will cause.”

 

We could not agree more. And the dozens of organizations that have signed onto this letter are a further sign of the problems with these deals. As more and more people become knowledgeable about Anthem-Cigna and Aetna-Humana, opposition to the mergers grows.  It is therefore all the more vital that DOJ’s review of the mergers be complete, transparent, and focused on benefits for consumers.

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