Whoa on Aetna-Humana, Anthem-Cigna deals, 9 groups say

medical dollarsA coalition of nine consumer advocacy and union groups are urging Florida regulators to think twice about approving big health mergers they say will reduce competition and consumer choice and could lead to higher premiums in counties including Palm Beach.

For example, combining Aetna and Humana “would give the combined entity over half of all Medicare Advantage enrollees in five Florida counties: Broward, Franklin, Palm Beach, Pasco, Volusia,” according to a letter signed by Washington-based attorneys representing the groups.

The organizations include Consumers Union, Florida CHAIN, Florida Rural Health Association, U.S. PIRG,1199 SEIU United Healthcare Workers East, Consumer Watchdog, Florida Policy Institute, Consumer Action and Florida PIRG.

“Many of the most important consumer groups, health care providers, and unions are speaking in a single voice raising the profound concerns raised by these mergers,” said David A. Balto, former policy director for the Federal Trade Commission and public interest antitrust attorney who is counsel of record for the groups. “They document how history demonstrates consumers lose when insurers get bigger by paying higher premiums, suffering through more limited networks, and receiving worse service. That’s why these groups have called for careful scrutiny by the Insurance Commissioner and the Florida Office of Insurance Regulation.”

The letter came a day ahead of the Thursday deadline for public comment on the proposed Aetna-Humana merger.  The deadline is Friday for Anthem’s acquisition of Cigna and affiliates.

The review by the Florida Office of Insurance Regulation is one of several at the state and federal levels to be completed in coming months.

Simply rubber-stamping the deals will result in too much concentration of market power, the comment letter says.

“As a result of these two mergers, four companies, Florida Blue, UnitedHealth, Aetna, and Anthem would control just under 90 percent of the Florida commercial market,” the letter says. It also asserts Florida would see one of the nation’s biggest concentrations of market power in the “administrative-services-only” market, where insurers administer plans for companies who pay their own claims.

Aetna and Humana representatives said at a Dec. 7 hearing they expect to save $1.25 billion through their proposed merger by 2018 and their combined expertise will help them serve customers better. The deal would capitalize on “complementary” strengths in different areas of business, they argued.

“While the merging companies have argued supposed benefits associated with these mergers, available scholarly evidence suggests that consumers will see limited to no benefits and instead will face higher costs, less innovation, and potentially lower quality of care,” the comment letter says.

Florida’s Biggest Health Insurers

1. UnitedHealth Grp $8.9 billion
2. BCBS Of Florida Grp $8.8 billion
3. Humana Grp  $7.9 billion
4. Aetna Grp  $3.5 billion
5. WellCare Grp $2.1 billion
6. Cigna Health Grp $1.9 billion
7. America’s 1st Choice Grp $1 billion
8. Centene Corp Grp $788 million
9. AvMed $783 million
10.WellPoint Inc Grp $615 million

Source: Florida Office of Insurance Regulation, 2013 premiums

 

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