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East County News Service

January 12, 2016 (Sacramento) – Consumer advocates are voicing concerns that mergers of giant health insurance companies proposed in California could lead to higher  insurance costs and fewer  healthcare choices for Californians. If the mergers are approved by regulators, three health insurance companies would control almost half of the U.S. commercial insurance market.

Anthem Inc. hopes to buy Cigna Corp. in a $54.2 billion deal.  In addition, Aetna Inc. wants to take over its rival, Humana, for $37 billion. That would put Anthem and Aetna at the top of the industry, along with United Health Group Inc. and make Aetna California’s biggest health insurer, surpassing Kaiser Permanente.  The Los Angeles Times reports that yet another acquisition of Health Net Inc. by Centene is also proposed in California.

State regulators are holding hearings on the proposed mergers, debating whether limits on rate hikes should be imposed or provider networks expanded as conditions of the deals. The proposed mergers are also under scrutiny at the federal level by the U.S. Justice Department’s antitrust officials.

The big companies have said mergers will help them save money, such as by limiting their reimbursement to doctors and other medical providers for certain high-cost surgeries or to pharmacies for high-priced drugs.  Some insurers have told state regulators that they intend to have a portion of savings “flow back to consumers through medical and pharmacy coverage that remains affordable as Fran Soistman of Aetna stated.

But Shelley Rouillard, director of California's Department of Managed Health Care, questioned that  since Aetna hiked rates four times in California since 2013, even though the hikes were deemed unnecessary. California regulators currently have no power to prevent rate hikes by health insurance companies, but could potential impose limits as conditions of merger approvals.  

Insurers have also been fined for listing doctors no longer in networks, and consumer complaints about limited choices in providers could get even worse if the mergers go through. So could lack of specialists in network and delays in timely care.

Insurance Commissioner Dave Jones has also voiced stong concerns about the mergers.

Jamie Court, president of Consumer Watchdog, says it is “completely reasonable to limit premium hikes, or you could require all of the networks to include more doctors,” but adds, “the question is whether regulators have the will to do it."


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