Mergers in the health insurance industry will not stifle competitiveness, the heads of Aetna and Anthem assured lawmakers on Tuesday at Senate hearings dealing with multibillion acquisitions sought by the two insurance giants.
Executives of Aetna, which is looking to buy Humana for $38 billion, and Anthem, which plans to acquire Cigna for $48 billion, told a Senate panel that their moves will benefit consumers.
The hearing camein the midst of a review by the Justice Department that seeks to determine whether the mergers could lead to monopolies in certain parts of the country. Congress does not have the authority to rule on mergers, but senators wanted to voice their opinions on the proposed acquisitions.
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"I want to make sure these deals do not harm consumers by increasing premiums or reducing benefits," said Sen. Amy Klobuchar, D-Minn., at the hearing.
"I am deeply concerned about these mergers," added Sen. Richard Blumenthal, D-Conn.
Insurers have said that the mergers provide them more leverage in negotiating favorable prices with providers.
Aetna's acquisition of Humana is driven largely by the latter's role in the burgeoning Medicare Advantage market. Skeptics of the plan point to a lack of insurance competition in the MA market in certain areas, particularly rural America. One influential group, the American Hospital Association, raised concerns at the hearing about the implications for consumers.
Many in the medical industry attribute the rash or mergers among providers and payers to the Patient Protection and Affordable Care Act. They say the landmark reform has pushed medical entities to rein in costs and meet care-quality benchmarks. In what resembles a chicken-or-the-egg effect, hospitals and providers see the other as increasingly large, meaning they need to become bigger to boost their ability to negotiate prices.
"The ACA is a trigger," Robert Kocher, a former White House health adviser, told the Wall Street Journal. "(A)s providers have gotten consolidated, payers have been finding they're getting pushed by providers saying, 'Take my rates or you'll have no network.'"
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