Insurance mergers transition into battle of the lobbyists

When it comes to the pending mega-mergers among health insurers, hospitals and other providers have begun to peel the gloves off, according to Forbes magazine.

The American Hospital Association (AHA) and the American Medical Association plan to testify before Congress later this month, urging lawmakers and federal regulators to closely scrutinize pending mergers between Aetna and Humana and Cigna and Anthem, according to the article.

And AHA appears to be deadly serious in its concerns regarding the potential deals. Last month, it sent a letter to the U.S. Justice Department, expressing concern that the deals could "substantially reduce competition and substantially diminish the insurers' willingness to be innovative partners with providers and consumers in transforming care."

Although Forbes suggests that the hearings will be more political theater than anything else, it is possible that they could take on the weight of the hearings that scrutinized the proposed Comcast-Time Warner deal, which was eventually scuttled due to public opposition. Both companies were generally loathed by consumers, and they feared that a merger would amplify their reputation for pricey plans and indifferent customer service.

Many providers are concerned that with too much leverage in certain geographic markets gained through mergers, insurers could ratchet down the fees they pay them under contract to provide care to their enrollees, all the while dialing up premiums in order to capture more profits. However, some voices in the finance realm have suggested that such mergers could actually drive down costs in the long run by providing much-needed scale to the industry's overall operations. 

However, the health insurers have also stocked up on their own lobbyists who will also testify in favor of the deal, Forbes reported. Aetna has hired four different lobbying firms to press its case, while Cigna has hired three firms, according to the Connecticut Mirror.

To learn more:
- read the Forbes article 
- check out the Connecticut Mirror article

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