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Who benefits from insurance mega-deals?

By Rick Pollack
August 6, 2015

Recent announcements about commercial insurance company acquisitions continue to send up red flags and with good reason. The question on everyone’s mind is: How can these mega-deals possibly benefit consumers? The insurance industry already is enormously concentrated and has a dismal track record of passing savings on to consumers. 

Today the AHA sent the Department of Justice Antitrust Division a letter asking for a vigorous review of the Anthem-Cigna deal. The letter states that:

“We endorse the Department’s often stated position that reforms in the health insurance industry are dependent on vigorous antitrust enforcement, particularly those involving significant commercial insurers where there is the very real potential for those deals to substantially reduce competition and substantially diminish the insurers’ willingness to be innovative partners with providers and consumers in transforming care”

Independent research on previous insurance market consolidation shows that insurers do not share savings with their customers. In fact some increased health insurance premiums. The bottom line is that consumers end up paying the same amount – or even more – for their coverage. And insurers pocket any savings. 

Recent statements in the press suggest the Department of Justice’s Antitrust Division is similarly skeptical about the benefits of these deals and will probe them thoroughly.

The AHA will work closely with other stakeholders, the Antitrust Division, Congress, other government agencies as they review these mega-deals. 

Topic: Access and Coverage
Tags: acquisitions, consolidation, mergers, Coverage, access, price, antitrust

Richard J. (Rick) Pollack is the President and CEO of the American Hospital Association.

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