Justice Department sues to block health insurer mergers

Last July, Just Care reported the merger of Anthem and Cigna and of Humana and Aetna and their potential threat to the public good.. One year later, July 2016, the Justice Department filed two separate lawsuits to block these mega-mergers, acknowledging the potential harm to people if they were to go through.

Were these mergers to go through, we would have three super-big national health insurers instead of five very big ones. And, if history is any indicator, this market consolidation would present risks of higher health insurance premiums, lesser benefits, lower health care quality, and fewer choices for people in Medicare Advantage plans and in the state health insurance exchanges.

David Balto, a lawyer and former antitrust attorney in the Justice Department, helped spearhead opposition to the mergers. He reports that “the mergers faced strong opposition from the Justice Department, state enforcers, and Congress, and most important from consumers since day one.  And for good reason — history tells a simple and compelling story — when insurers merge consumers lose through higher prices and deteriorating service.  We have too little competition as it is in health insurance and the DOJ action is vital to protecting the marketplace.”

To be sure, hospital systems have become a lot larger. And, the insurers are arguing that insurance company mergers are their best hope of controlling hospital costs. But, the solution is not to let these mergers happen. It’s to give everyone Medicare or a public option that drives greater competition among hospitals and doctors.

Medicare Advantage is its own market with special attractions. If the Aetna Humana merger happens, that new company would be the biggest provider of Medicare Advantage plans. The Medicare marketplace would have less competition in many communities, which would jeopardize the health security of older adults and people with disabilities.

Just recently, President Obama called for a public health insurance option, a plan like Medicare, in communities without adequate competition among insurers. If the Justice Department is not successful in its lawsuits, we’d have less competition among health insurers and greater need for a public option in the state health exchanges. People in the state health insurance exchanges, like all of us, benefit from having meaningful health insurance choices.

Here’s more from Just Care:

• Five programs that lower your costs if you have Medicare
• Competition can’t rein in health care costs
• If commercial insurers paid hospitals Medicare rates, spending would drop 31 percent
• Hospital prices out of control, competition is not working
• Medicare controls costs while private insurers sit idly by