Health insurance mega-mergers: Bad medicine for Colorado

Tuesday, November 22, 2016 09:30 AM

On Nov. 21, the lawsuit against the proposed Anthem-Cigna merger filed by the U.S. Department of Justice (DOJ) and numerous state attorneys general, including Colorado Attorney General Cynthia Coffman, went to trial. The lawsuit against the Aetna-Humana merger is scheduled to go to trial Dec. 5.

On Nov. 10, plaintiffs filed a pretrial brief in the Anthem-Cigna case that prominently featured the monopsony claim—a health insurer’s ability to compensate providers below competitive levels. The brief emphasized that antitrust laws protect buyers and sellers equally. Thus, physicians, as sellers of services, should receive the same antitrust protection from being victimized by an insurer merger as insurers receive in the case of a merger of providers.

The Colorado Medical Society is on record that the mergers will result in higher premiums, less patient access/time with physicians, reductions in staff, cuts in infrastructure and/or technology spending, and a move away from community-based practices. CMS has been participating in a 16-state medical society “Block the Merger Campaign” expertly led by the American Medical Association.

“We believe these blockbuster mergers amount to a grab at anticompetitive market power that would substantially decrease competition in several of the state’s health insurance markets,” said CMS President Katie Lozano, MD, FACR.

According to an AMA analysis based on federal antitrust guidelines, the Aetna-Humana merger would enhance Aetna’s market power in Medicare Advantage markets in Boulder, Colorado Springs, Greeley, Pueblo, Grand Junction and Fort Collins-Loveland. The Anthem-Cigna merger also raises significant competitive concerns in Colorado.

“If Anthem or Aetna get their way, these companies will have even less incentive than they do now to take care of people, and the mergers would ultimately compromise the ability of physicians to advocate for their patients,” said AMA President Andrew W Gurman, M.D. “In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care.”

The DOJ and Attorney General Coffman deserve credit for joining forces in a legal challenge to prevent these unprecedented mergers, which, if completed, would harm Colorado patients. Stay tuned for more updates on the two trials.