AMA Study: Health Insurance Mergers Would Diminish Competition in Many States

From AMA reports

The combined impact of proposed mergers among four of the nation’s largest health insurance companies would exceed federal antitrust guidelines designed to preserve competition in as many as 97 metropolitan areas within 17 states, according to new special analyses of commercial health insurance markets by the American Medical Association (AMA).

For these locations, the mergers would enhance market power. According to the U.S. Department of Justice, “a merger enhances market power if it is likely to encourage one or more firms to raise price, reduce output, diminish innovation, or otherwise harm customers as a result of diminished competitive constraints or incentives.”

The mergers would also raise significant competitive concerns in additional markets. All told, the two mergers would diminish competition in up to 154 metropolitan areas within 23 states.

“A lack of competition in health insurer markets is not in the best interests of patients or physicians,” said AMA President Steven J. Stack, M.D. “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. Given these factors, AMA is urging federal and state regulators to carefully review the proposed mergers and use enforcement tools to preserve competition.”

These findings are based on an in-depth analysis of data used to create the newly released 2015 edition of AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets, which offers the largest and most complete picture of competition in health insurance markets for 388 metropolitan areas, as well as all 50 states and the District of Columbia. The study is based on 2013 data captured from commercial enrollment in fully and self-insured plans, and includes participation in consumer-driven health plans.

Read The New York Times’ take on the AMA study.

 
 

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