Detrimental Anthem/Cigna & Aetna/Humana Mergers

         If the proposed Anthem/Cigna and Aetna/Humana mergers are allowed to proceed, the combined entities will control roughly 90 percent of both Georgia’s individual health insurance market. Additionally, these entities will subsequently control 90 percent of both the Medicare Title XVIII market and the large group markets in Georgia. The carriers assert that consolidation will improve their ability to operate more efficiently and enhance care quality, however the sheer size of their presence is concerning. The Medical Loss Ratio (MLR) found in Section 1001 of the Patient Protection and Affordable Care Act stipulates an annual minimum of 80% (Individual/Small group Plans) - 85%(Large Group Plans) of the share of health care premium dollars are spent on medical benefits, thus encouraging mergers/acquisitions to bring profitability to scale for these major insurers. Health Affairs, amongst others, offer considerable evidence that there is no clear pattern of administrative cost savings associated with these mergers, as Anthem states no they will not reduce staff size, most of the savings inherently will be found in discounting Cigna’s payment rates they’ve negotiated under their Blue Cross Blue Shield name brand.

          Recently, a Medical Association of Georgia (MAG) survey highlighted 30% of Georgian physicians believed that the Aetna/Humana merger alone would threaten the long-term viability of their practiceDr. John Harvey, president of MAG, explicitly stated his fear for Georgia’s consumers as rural providers will maintain even less leverage with these conglomerates.  Similarly The American Medical Association (AMA) argued that both mergers independently would reduce market power for providers and consumers here in Georgia. California’s Insurance Commissioner recently argued the $53 billion Anthem/Cigna deal does not explicitly offer verifiable support to increase quality or access which will become inherently detrimental for patients, providers, and employers. As of late June 2016, several representatives are continuing to oppose each deal of anti-competitive levels of market concentration, it is imperative to maintain dialogue with our representatives.

If you have any questions on these issues please contact our office at (912) 691-5711; we strongly urge you to contact your representatives including Department of Insurance Commissioner Ralph Hudgens at mergercomments@oci.ga.gov or:

Administrative Procedure Division 2

2 Martin Luther King Jr. Drive, West Tower

Ste 1016

Atlanta, GA 30334

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