Kathleen Sebelius questions big insurer mergers

Former HHS Secretary Kathleen Sebelius discussed possible consequences of Anthem-Cigna and Aetna-Humana mergers last week with the International Business Times, raising questions about how the deals would affect consumers.

Ms. Sebelius, a key advocate for the Affordable Care Act, said one of the law's preemptive goals was to foster competition between insurers to decrease prices and increase choice for consumers. She told IBT that mergers between the largest insurers could do just the opposite, hindering competition and heightening consumer costs.

"To go from five major insurance companies to three insurance companies is a dramatically different playing field across the board, so this will impact every state, every population, just given the size of these mergers," Mrs. Sebelius told IBT.

Contrary to these comments, insurance company executives said mergers will make insurance more efficient and cost saving. For example, last year Cigna CEO David Cordani defended the Anthem-Cigna merger, stating it would "increase choice, not decrease choice." Mr. Cordani would personally gain $58 million if the merger succeeds.

To this, Mrs. Sebelius responded that "the shareholders have signed off on this with all four companies, and so they clearly are confident that these mergers will produce more profitable insurance companies," she said. "What the regulators want to know — and it sort of gets flipped — is what happens to consumers? Is this bad or good for consumers? And they are not necessarily the same answers," she told IBT.

Prior to working in President Obama's cabinet, Mrs. Sebelius served as the insurance commissioner and governor of Kansas. In 2002, she blocked Anthem's acquisition of Kansas Blue Cross Blue Shield in a "precedent-setting case," according to IBT.

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