The American Hospital Association (AHA) reinforced its objections to the Anthem-Cigna merger this week, homing in on concerns that the partnership would give Blue Cross Blue Shield plans an even larger share of the health insurance market, raise costs for consumers and in some cases, pushi competitors out of certain markets altogether, according to a letter sent to the Department of Justice (DOJ).
Expounding on issues raised in an initial letter sent by the AHA in August that argued both the Anthem-Cigna merger and the Aetna-Humana deal would "substantially reduce competition," Monday's 20-page letter said Anthem's acquisition would "further entrench" dominant Blues plans, and "exacerbate conditions conducive to abuse of market or monopoly power." The merger would bring significant competitive concerns in many markets where Blues plans already have a stronghold, and in some cases, exclude competitors from the market entirely.
The merger would represent a 14 percent increase in beneficiaries under Blues plans, the AHA wrote. The additional beneficiaries would provide Blues plans with even greater market power, which could be detrimental to new companies looking to use state marketplaces as a "launching pad" for growth.
Anthem has previously stated that the Cigna brand would be rolled into the Blue Cross portfolio in 14 states, but Cigna plans would continue competing against Blues plans in the national account market.
With more control, Blues plans would also have the ability to negotiate steep discounts from providers, while raising premiums for consumers, according to AHA. Last year, the American Medical Association published a study indicating that the Anthem-Cigna merger would diminish competition in up to 111 metropolitan areas within 14 states. Others have argued that consolidation could actually lower provider costs in the long run.
The AHA has been outspoken in its opposition to both major health insurance mergers ever since the deals were announced, citing the problematic implications for Medicare Advantage plans if the Aetna-Humana deal were to get federal approval.
To learn more:
- read the AHA letter