Something that a lot of health insurance clients tend to ignore is the fact that they are dealing with a company which has profits as their bottom line and can easily make business decisions a priority over the welfare of their clients. As a result, companies often do things that end up costing customers in terms of their premium costs, the terms and conditions of coverage and even removing their coverage altogether.
One of the biggest reasons for these things to happen is mergers. When a company is bought by another, usually bigger company, the smaller entity will be subject to the rules and practices of the other. As a result, a lot of changes can occur which could put consumers at a disadvantage. This is why a coalition of two consumer groups and labor unions in New York was formed in order to oppose a planned merger to occur among giant insurance companies.
The group, officially named the Coalition to Preserve Patient Choice was created in response to the move by Anthem Inc. to buy Cigna Corp for the hefty sum of $47 billion and the decision of Aetna Inc. to purchase Humana Inc. at a price of $37 billion. This would then effectively reduce the number of choices by the American public to buy insurance from to just three major insurance companies instead of five. If you’re wondering why this is a big deal, the answer comes down to the cost of premiums.
In a statement, the group said, “The CPPC believes these mergers should be challenged or patient choice will suffer. In fact, studies have shown previous health insurance mergers resulted in (price) increases ranging from 7 percent to nearly 14 percent.”
As a result from this concern, the coalition is pressing antitrust regulators to step in and stop the mergers from happening, a move that the companies in question are calling absurd. Anthem even calls the assertions of the coalition to be misleading and they are saying that the have confidence in the ability of the regulators to understand the benefits that the consumers will receive from the merger.
As for Aetna, they said that the merger was “primarily about the Medicare marketplace, where there is robust competition and choice. We are confident that our transaction will receive a fair, thorough and fact-based review from the Department of Justice and the states.”
The case is currently being reviewed at the moment by the US Department of Justice and the CPPC is hopeful that their decision goes their way. A few prominent figures have weighed in as well, with many expressing doubts that the merger would benefit consumers in any way.