The American Medical Association and several consumer groups called on a New York regulator to reject Anthem and Cigna's proposed $53 billion merger over concerns it will stifle insurance competition and lead to more costly, lower quality healthcare across the state.
The majority of speakers at a two-hour New York Department of Financial Services hearing Thursday told the state agency that regulation and concessions from the insurers would not ameliorate the anticompetitive impact the massive insurer consolidation would have on consumers, businesses or providers.
“If Anthem gets its way, it will have even less incentive than it does now to take care of people, and the merger would ultimately compromise the ability of physicians to advocate for their patients,” said Dr. Malcolm Reid, president of the Medical Society of the State of New York. “In practice, market power allows big insurers to exercise control over clinical decisions, which undermines the patient-physician relationship and eliminates key safeguards of patient care.”
Reed also noted that the lack of insurer competition has negatively affected physicians and providers, who feel they have no choice but to join large health systems rather than struggle to negotiate reimbursement rates with powerful insurance giants. The medical society believes those struggles will only get worse if Anthem and Cigna consolidate.
According to an AMA analysis presented to state regulators, the Anthem-Cigna merger would give the new insurance behemoth anticompetitive market power in Long Island and there are significant concerns about its concentration in the New York City and Hudson Valley markets.
Although Anthem and Cigna maintain that the merger will create new efficiencies that will lead to cost savings for the company and its customers, the AMA argues that it's more likely that premiums will increase after the merger goes through and there's nothing pushing Anthem to stick to its commitment of promoting value-based care.
“The diminished competition leading to higher prices will also lead to lower plan quality,” said Henry Allen, AMA's top antitrust attorney. “They lack the incentives to pass savings on to consumers.”
Consumer advocacy groups echoed the AMA's concerns, urging the state regulator to outright reject the merger. Several also blasted Anthem's Empire Blue Cross and Blue Shield plan for its shoddy consumer record, pointing out it has the most consumer complaints filed to DFS among New York HMO and PPO plans.
But Anthem and Cigna did have a few supporters in the mix. Lev Ginsburg, director of government affairs at The Business Council, told regulators that the merger could create a more efficient insurance market in New York that would drive down premiums. By creating a larger insurer, Ginsburg maintained the insurer could negotiate better drug prices and shift the balance in insurer-provider negotiations over their reimbursement rates, which is a big driver of premium costs.
“The more efficiencies we can provide, the lower the premiums can be,” Ginsburg said. “The bigger the groups, the lower the premiums can be.
DFS' superintendent of financial services Maria T. Vullo acknowledged that the agency is trying to balance a complex set of concerns over the merger, and requested insight into what safeguards they should implement if the merger goes through.