Hospitals lay out concerns about Aetna-Humana deal

The American Hospital Association submitted a letter to the Department of Justice and HHS this week citing concerns about the proposed Aetna-Humana deal.

The AHA stated that the proposed merger between two of the five largest U.S. health insurance companies, as well as the proposed Anthem-Cigna deal, present real potential "to reduce competition substantially, increase the cost of premiums and diminish the insurers' willingness to be innovative partners with providers and consumers in transforming healthcare."

"Viewed in tandem the two deals would reduce the number of major health insurers from five to three and adversely impact millions of consumers," Melinda Reid Hatton, senior vice president and general counsel for AHA, wrote to the DOJ's antitrust division and HHS Secretary Sylvia Matthews Burwell.  

She said the proposed Aetna-Humana deal raises particular concerns about an adverse impact on the Medicare Advantage program. More than 2.7 million seniors are enrolled in Medicare Advantage plans operated by the companies in more than 1,000 markets that "would become highly concentrated," she said.

"The substantial barriers to entry in the health insurance sector make it extraordinarily unlikely that existing firms could replicate the size and scope of the insurers involved in this proposed transaction," Ms. Hatton wrote. "This strongly suggests that the acquisition likely would serve only to exacerbate problematic coverage and cost trends as well as produce other adverse impacts on access and innovation. Significantly, it appears doubtful that divestitures alone would remedy the loss of competition threatened by this acquisition."

But Aetna and Humana and supporters of the deal contend that the proposed merger would allow the plans to extract price cuts from physicians and hospitals, which would be a positive, according to Forbes. In addition, health plans also say they need to combine to reduce overhead and stay in compliance with rules under the Affordable Care Act that demand more money be spent on medical care instead of administrative costs, Forbes notes.

This is not the first time the AHA has expressed concerns about the recent insurer mega-mergers. The AHA also wrote to the DOJ's antitrust division on Aug. 5 about the proposed Anthem-Cigna deal.


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