Democratic senators ask DOJ to block insurer mergers

Seven Democratic senators have come out against the pending Aetna-Humana and Anthem-Cigna mergers, calling on the Justice Department to block the deals.

“We are deeply concerned by the detrimental impact that both of these mergers would have on premium prices, jobs and healthcare costs for consumers and businesses,” Sens. Richard Blumenthal, Al Franken, Elizabeth Warren, Sherrod Brown, Edward Markey and Dianne Feinstein write in a letter to the DOJ.

Already, the three largest health insurers hold 80 percent of the market share in almost two-thirds of states, the letter notes. If the mergers are approved, one analysis shows that competition would be reduced in 126 of the country’s 388 metropolitan statistical areas.

This further consolidation would result in market power abuse that would harm consumers via increased costs and diminished competition, choice and access to quality healthcare, the letter says. The merging insurers argue that their market power would help them negotiate for better prices and care quality, but the evidence “overwhelmingly” shows any savings achieved will likely not be passed on to consumers, according to the letter.

During a previous congressional hearing on the topic of the mergers, Franken challenged Aetna CEO Mark Bertolini and Anthem CEO Joseph Swedish to commit to passing any merger-related savings to consumers. Both indicated savings would be passed on to consumers through the design and prices of the insurance products they sell.

The letter adds that the senators believe “no divestitures or behavioral remedies” would adequately mitigate the mergers’ effect on competition in the industry. Indeed, a previous report from the Center for American Progress questioned whether Medicare Advantage divestitures would do enough to maintain competition if Aetna and Humana merge.

It’s the Anthem-Cigna deal, however, that federal regulators may be more concerned about, according to recent reports about a meeting between DOJ officials and leaders from the two companies. Regulators seemed skeptical that the insurers would be able to offer satisfactory solutions to the merger’s effect on competition.

To learn more:
- read the letter (.pdf)