American Medical Association urges feds to block insurer mergers

Continuing the healthcare provider community's criticism of consolidation in the health insurance industry, the American Medical Association (AMA) has officially asked federal regulators to block the two major insurer mergers.

This summer, Aetna announced it will acquire Humana and Anthem said it will merge with Cigna. Pending regulatory approval, the deals would narrow the five major U.S. insurers down to three, including the nation's largest, UnitedHealth Group.

In a letter to U.S. Assistant Attorney General William Baer, AMA states that "any remedy short of blocking the mergers would not adequately protect consumers."

The group offers several reasons for this conclusion, including a "growing body of peer-reviewed literature" that suggests greater insurer consolidation will lead to higher health plan prices, lower quality and possibly even more restrictive networks. And when insurers have more buying power, they will reimburse physicians below competitive levels, lessening care quality and even eventually contributing to the doctor shortage, the letter states.

The AMA also argues that the mergers will take place in markets in which "there has already been a near total collapse of competition." That statement echoes a recent study from the Commonwealth Fund that found there is already little or no competition in 97 percent of Medicare Advantage markets, which the American Hospital Association (AHA) cited in a September letter to Baer arguing against the Aetna-Humana merger. The AMA has also conducted its own study of the two mergers' effects, finding both would erode competition in various markets.  

What's more, even potential divestitures on the part of the merging companies are not likely to protect against the loss of competition in insurance markets, the AMA letter states. While Anthem has said it does not plan to make any divestitures to complete its deal, experts believe Aetna will have to do so.

Finally, AMA says there is no evidence to support the insurers' claim that the proposed mergers would lead to greater efficiencies and innovative payment and care management programs, nor is there evidence that consumers benefit from health insurers merging to counterbalance provider consolidation. Both AMA and AHA representatives have echoed these sentiments in recent congressional hearings about the mergers, though Aetna and Anthem CEOs Mark Bertolini and Joseph Swedish have argued the opposite.

America's Health Insurance Plans also disputes the AMA's claims, as Press Secretary Clare Krusing wrote in a statement emailed to FierceHealthPayer that "the AMA's 17-page press release on health plan mergers will have no impact on the [Department of Justice's] review of these transactions. Their flawed data set has consistently been rebuked by leading economists and is a far cry from the reality of today's marketplace."

To learn more:
- here's the AMA's letter

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