February 21, 2017
Area(s) of Interest: Commercial Payors Payor Issues and Reimbursement
A federal judge has blocked the $48 billion mega-merger between Anthem and Cigna (U.S. v. Anthem Inc., 16-cv-1493). The ruling favored the U.S. Department of Justice (DOJ) and 11 states, including California, who argued that the Anthem-Cigna merger would limit price competition and lower the quality of care that Americans receive.
“The California Medical Association (CMA) has opposed the Anthem-Cigna mega-merger since day one because it would hurt patients and increase health care costs,” said CMA President Ruth E. Haskins, M.D. “Limiting market competition would compel insurers to contract with fewer physicians, resulting in patients facing higher premiums and longer wait times for referrals – not to mention forcing many patients to pay out-of-pocket to see out-of-network doctors.”
Seventy-one percent of the nation’s metropolitan areas already lack competitive commercial health insurance markets. A merger between Anthem and Cigna would have further diminished competition in 121 metro areas throughout the 14 states where Anthem is licensed to provide commercial coverage.
“We are pleased that Judge Berman Jackson ruled in favor of providing patients with the affordable, quality care they deserve,” said Dr. Haskins. “Maintaining competition in California’s health insurance markets is essential – it gives patients more choice in managing their health care while keeping costs low.”
Last month, another federal court blocked Aetna Inc.’s proposed merger with Humana on the grounds that it violated anti-trust law. CMA, which represents 43,000 physicians across all modes of practice, also opposed this $34 billion mega-merger, which would have disproportionately affected the accessibility and affordability of health care for millions of vulnerable seniors.
In March 2016, a CMA-backed survey of California physicians revealed that an overwhelming 85 percent opposed the Anthem-Cigna merger and 83 percent opposed the Aetna-Humana merger. Out of the 989 physicians surveyed from practices across the state, the majority expressed worries that health insurer consolidations could narrow physician networks (82 percent), force physicians to provide fewer services (90 percent) and pressure physicians into refraining from aggressive patient advocacy (75 percent).