By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Doctors warn fleeting competition in insurance will boost prices
After two merger plans were announced in July, some physician associations are now railing against the proposals they say would raise prices for patients. - photo by Daniel Bendtsen
And then there were three.

Thats the number of major health insurance providers many American consumers will have if federal regulators approve a pair of mergers that would whittle the number from five.

The American Medical Association says neither deal should be allowed. The two mergers would diminish competition in up to 154 metropolitan areas within 23 states, a Tuesday AMA press release warned.

The American Hospital Association also criticized the deal in a letter mailed to the Department of Justice last week.

The harm the transaction threatens to consumers and particularly to senior citizens and other vulnerable populations who depend on Medicare Advantage programs for their health care is large and durable, according to the AHAs analysis. The resulting loss of competition will harm seniors by making it considerably more difficult for them to obtain affordable, comprehensive health care coverage.

In July, Anthem agreed to acquire Cigna for $53 billion less than a month after Aetna announced it would buy Humana for $37 billion. According to CNN, the mergers would put 86 million insured Americans under these two companies.

Obamacare has meant more business for major insurers because more Americans have health coverage, but the law has also put more pressure on industry profits, CNN reported. Because of Obamacare restrictions, insurers lack the power to raise prices when they want.

Ironically, many provisions in the Affordable Care Act were designed with the intent to increase competition between insurance companies. The law opened sale of insurance across state lines and set up an online marketplace,, with the intent of making options more comprehensible to consumers.

In a Thursday hearing on insurance competition, House Judiciary Committee Chairman Bob Goodlatte, R-Va., blamed the ACA for a reduction in competition, an assertion contested by a leading expert.

"It would be erroneous to claim that the Affordable Care Act is somehow responsible this consolidation," Thomas Greaney of the Center for Health Law Studies testified, further arguing that the insurance consolidation was underway before Obamacare was passed.

Major insurers defend the deal on the grounds that the mergers will allow them to increase efficiency and lower costs, according to The New York Times.

Insurers and some economists say that criticism of the mergers is inspired by self-interest a fear that bigger insurance companies will cut payments to doctors and hospitals, The Times reported on Tuesday. But the findings of the medical and hospital associations are broadly consistent with data collected by the Government Accountability Office, an independent investigative arm of Congress.

Dan Durham, representing American's Health Insurance Plans, testified that it could be possible for the mergers to increase competition.

"In the context of health care, this might include a circumstance when an insurance entity with strength in one particular area is able to offer a better product because it is joined with an entity that offers complementary strengths," Durham said.
Sign up for our e-newsletters