AMA Releases Analyses of Health Insurer Mergers

Created on: Tuesday, September 08, 2015

According to new analyses of commercial health insurance markets issued by the American Medical Association, the combined impact of proposed mergers between Anthem and Cigna and between Aetna and Humana would exceed federal antitrust guidelines in as many as 154 metropolitan areas within 23 states. The mergers would enhance market power within these locations, which means that they would be “likely to encourage one or more firms to raise price, reduce output, diminish innovation, or otherwise harm customers as a result of diminished competitive constraints or incentives,” the U.S. Department of Justice’s definition of enhanced market power.

AMA President Steven J. Stack, MD said, “A lack of competition in health insurer markets is not in the best interests of patients or physicians…AMA is urging federal and state regulators to carefully review the proposed mergers and use enforcement tools to preserve competition.”

The Anthem-Cigna merger would enhance market power and raise significant competitive concerns in up to 111 metropolitan areas within all 14 states in which Anthem currently operates, including Maine. The findings are based on an in-depth analysis of data used to create the newly released 2015 edition of AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets. The study is based on 2013 data captured from commercial enrollment in fully and self-insured plans and includes participation in consumer-driven health plans.

The AMA says that the prospect of reducing five national health insurance carriers to just three should be viewed in the context of the unprecedented lack of competition that already exists in most health insurance markets. According to the study, a significant absence of health insurer competition was found in seven out of 10 metropolitan areas studied. These markets are rated “highly concentrated” based on federal guidelines used to assess the degree of competition in a given market. In nearly two out of five metropolitan areas studied, a single health insurer had at least a 50% share of the commercial health insurance market.


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