Lack of Competition is Not Good For Consumers

Mar 01, 2016 - 07:37 AM

Today in a letter to the Department of Justice (DOJ) the AHA raised concerns about the proposed Anthem acquisition of Cigna focusing on the impact of Anthem’s affiliation with the Blue Cross Blue Shield System.

The letter states:

“Previous investigations also suggest that increased Blue plan market power will raise, not lower, premiums to consumers. We would expect that same impact on premiums in any state with a dominant or near-dominant Blue plan that gains any additional market power as a result of this acquisition.  And, no speculative claim of efficiency gains by the parties can offset the likelihood that premiums will increase for consumers as a result of this transaction.

Finally, the temptation for dominant plans to abuse their market power will only increase as a result of this acquisition.  Some dominant Blue plans already have the financial and other means to undermine or defeat entry or expansion by other plans, even established plans.  Eliminating a national competitor better able to withstand the onslaught of a variety of anticompetitive tactics will almost certainly embolden this conduct, thereby harming, perhaps irreparably, any chance of increasing competition and consumer choice.”

The AHA continues to ask DOJ to challenge this acquisition and examine the impact on competition, including the increase in barriers to competition in states where Anthem is not the Blue plan because we believe this deal threatens to undermine reform by discouraging or blocking entirely new entry and entrenching already dominant insurers across the nation.

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