In a recent letter to the Department of Justice, the American Hospital Association said the proposed Anthem-Cigna merger will reduce competition in the Administrative Services Only — or self-insured — market.
The letter detailed how Cigna and Anthem are claiming that "combining ASO plans presents relatively low antitrust risk, even in highly concentrated markets, because health plans merely 'pass through' provider costs to customers and, therefore, do not have the opportunity to earn a profit on them, or on the financial risk associated with the customers' medical claims," according to AHA Senior Vice President and General Counsel Melinda Reid Hatton, who wrote the letter.
However, the AHA argues that "[a]ny notion that ASO health insurance contracts are somehow immune from the standard principles of supply and demand is inconsistent with market realities, basic economics and common sense."
Click here to read the letter in its entirety.