COURT BLOCKS ANTHEM –CIGNA MERGER, DRAWING PRAISE FROM DOCTORS AND REGULATORS

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By Miriam Raftery

February 11, 2017 (Washington D.C.) — Just two weeks after a court blocked merger of insurance giants Aetna and Humana, the U.S. District Court in Washington D.C. has blocked another major insurance merger. This time, the court halted Anthem’s proposed merger with Cigna, the Wall Street Journal reports.  The court sided with California and 11 other states, as well as the Obama Justice Department, which had argued that the merger would reduce price competition and lower the quality of healthcare.

“The California Medical Association 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. in a press statement. “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.”

Judge Berman Jackson’s ruling follows last month’s decision by Judge John Bates to block 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).

California Insurance Commissioner Dave Jones also praised the court’s action as a “significant win for consumers who need more choice, not less, in an already highly concentrated health insurance market. Bigger was definitely not better when it comes to the Anthem-Cigna merger.”

Jones held a hearing last year on the proposed merger and concluded it would be bad for consumers and businesses, as well as health care markets. He urged the U.S. Justice Department to file the lawsuit.

“Competition helps restrain prices, provide choice, and improves quality,” he concluded. “The Anthem-Cigna merger would have reduced competition in a market already dominated by just a few health insurers.”

 


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