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Aetna-Humana, Anthem-Cigna Mergers Will Reduce Competition in Half the US

Laura Joszt
Analyses from the American Medical Association determined the potential Aetna-Humana and Anthem-Cigna mergers will diminish competition in at least 23 states and more than 100 metropolitan areas.
Concerns with the proposed mergers of Anthem and Cigna and of Aetna and Humana have already been raised in letters from the American Hospital Association to HHS Secretary Sylvia Mathews Burwell.

Now analyses from the American Medical Association (AMA) on the potential mergers, which would reduce the top 5 health insurers in the United States down to just 3, reveal just how much competition in local health insurance markets could be reduced. Given the results of the analyses, the AMA is urging regulators to carefully review the proposed mergers and preserve competition.

"A lack of competition in health insurer markets is not in the best interests of patients or physicians," AMA President Steven J. Stack, MD, said in a statement. "If a health insurer merger is likely to erode competition, employers and patients may be charged higher than competitive premiums, and physicians may be pressured to accept unfair terms that undermine their role as patient advocates and their ability to provide high-quality care.”

One analysis found that the Anthem-Cigna merger would likely enhance market power in 10 states: New Hampshire, Indiana, Connecticut, Maine, Virginia, Georgia, Colorado, Montana, Nevada, and Kentucky. These states represent a majority of the 14 total states in which Anthem is licensed to provide commercial coverage. Furthermore, the merger raises competitive concerns and warrants scrutiny in Ohio, California, New York, and Wisconsin.

Looking at the more local level, the AMA determined that the Anthem-Cigna merger would enhance market power in 85 metropolitan areas within 13 states, plus the merger would raise significant concerns in additional markets. In total, the merger would diminish competition in 111 metropolitan areas within all 14 states that Anthem currently operates.

The Aetna-Humana merger will have less of an impact. In the second analysis, AMA found a merger between Aetna and Humana would enhance market power in only Kentucky and raise significant competitive concerns in Texas, Georgia, Utah, and Florida. In total the merger would diminish competition in 58 metropolitan areas within 14 states: Arizona, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, Wisconsin, and West Virginia.

All told, these 2 mergers, if both approved, would reduce competition in health insurance markets in nearly half the country (23 states total).

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