One of the industry’s biggest names is using his influence to urge the US Justice Department to reject a proposed $37 billion merger between two of the country’s largest health insurance companies.
California Insurance Commissioner Dave Jones said Thursday that allowing Aetna’s takeover of rival Humana would reduce competition in the state’s already concentrated market, hurting consumers and seniors in particular.
In his report, Jones told the Justice Department that a merged Aetna-Humana would claim over a quarter of all Advantage enrollees in the US, far outstripping that of any other insurer.
He also noted that neither Aetna nor Humana officials have guaranteed that consumers will see any of the $1.25 billion the companies say they will save annually as a result of the merger.
“The Aetna and Humana merger has anticompetitive impacts that will likely result in increased prices, decreased availability of health insurance products, and decreased quality and access to healthcare,” Jones said.
The California Department of Managed Health Care has already approved the Aetna-Humana transaction, noting Aetna’s agreement to keep any rate increases to a minimum and improve the quality of patient care. The company has also agreed to spend nearly $50 million on community investment projects, including the expansion of its service center and support for dental services in low-income communities.
Yet it is not enough to sway Jones.
“These undertakings do not eliminate the anti-competitive effects of the merger,” he said, noting that the DMHC did not weigh anti-trust concerns.
Jones’ comments come a week after urging the federal government to reject another mega-merger, Anthem’s $54 billion takeover of Cigna, also citing concerns with competition.
Jones does not have the authority to block a national merger. However, his recommendation as chief regulator of the country’s most populous state could influence the Justice Department, which does have the final say in both matters.
Aetna downplayed Jones’ comments, saying only that it had received approval from the DMHC, “the only regulatory agency in the state with official oversight of our acquisition.”
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