4 reasons the AMA says insurer mega-mergers will harm competition

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Anthem's acquisition of Cigna and Aetna's takeover of Humana would impede insurance market competition across 24 states, according to newly updated market analyses released by the American Medical Association Wednesday.

"The AMA analyses show that Anthem-Cigna and Aetna-Humana mergers would significantly compromise market competition in the health insurance industry and threaten healthcare access, quality and affordability," AMA President Andrew W. Gurman, MD, said in a statement. "With existing competition in health insurance markets already at alarmingly low levels, federal and state antitrust officials have powerful reasons to block harmful mergers and foster a more competitive marketplace that will operate in patients' best interests."

The study presents new data on the degree of competition in health insurance markets for 388 metropolitan areas. It is based on 2014 data captured from commercial enrollment in fully and self-insured health maintenance organizations, preferred provider organizations and point-of-service plans, and includes participation in consumer-driven health plans. The study also includes newly available data from the Affordable Care Act health insurance marketplaces.

The U.S. Department of Justice and attorneys general from several states have filed lawsuits against Anthem and Aetna out of concern their proposed acquisitions would impede health insurance competition. The AMA applauded the lawsuits against proposed Anthem-Cigna and Aetna-Humana deals, stating decreased competition in the health insurance market would harm patients. At this time, all insurers intend to fight the lawsuits and argue the deals are not anticompetitive.

Now, the AMA said it hopes the new analyses will help federal and state regulators as they try to identify markets where mergers may cause competitive harm to the local health system.

Here are four study findings:

1. Seventy-one percent of the health insurance markets for 388 metropolitan areas were highly concentrated, largely the result of consolidation.

2. In nearly all (91 percent) of the 388 metropolitan areas, at least one insurer had a commercial market share of 30 percent or greater, the study found.

3. According to the study, a single insurer's commercial market share was at least 50 percent in 40 percent of the 388 metropolitan areas.

4. The study also found 14 states had a single health insurer with at least a 50 percent share of the commercial health insurance market. Those states are Alabama, Delaware, Hawaii, Illinois, Indiana, Louisiana, Michigan, Nebraska, North Carolina, North Dakota, Rhode Island, South Carolina, Vermont and Wyoming.

 

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