By Jad Chamseddine, CQ Roll Call
July 29, 2015 -- A series of major health plan mergers is adding pressure on Congress to intervene to keep the marketplace competitive and hold down costs for consumers.
The 120,900-member American Academy of Family Physicians expressed concern in a letter to Senate and House leaders last week that three deals announced in quick succession could lead to "decreased choice for consumers, higher costs for purchasers and potentially establish mass disruptions in continuity of care due to changing and narrowing networks of physicians and hospitals."
Anthem Inc. said last week it plans to buy Cigna Corp. for $54.2 billion in a deal that would create the largest U.S. health insurer. Aetna Inc. agreed earlier this month to acquire Humana Inc. in a deal valued at $37 billion, the same week that Centene Corp. unveiled plans to buy HealthNet Inc. for $6.8 billion.
The doctors group is concerned that consolidation won't end there. "Lying in wait is UnitedHealthcare, currently the largest for-profit insurance company in the country," the trade group wrote. UnitedHealthcare didn't immediately respond to a request for comment.
Similar concerns were voiced by other medical trade organizations such as the American Medical Association (AMA). "The lack of a competitive health insurance market allows the few remaining companies to exploit their market power, dictate premium increases and pursue corporate policies that are contrary to patient interests," AMA President Steven J. Sack said in a statement after Anthem's announcement.
American Hospital Association CEO Richard Umbdenstock echoed those sentiments, urging the Justice Department, Congress, and other government agencies to further scrutinize "these worrisome deals."
"We urge the United States House of Representatives and Senate to carefully evaluate these proposed mergers to ensure that the alignment of these companies promotes the best interest of all patients," the academy said, "including Medicare and Medicaid beneficiaries, and the physicians and other providers of their car."
Hearings Set
The deals already have prompted the House Judiciary Committee to schedule a hearing on competition in the health care industry for early September when Congress returns from its August recess. Chairman Robert W. Goodlatte, R-Va., previously held hearings on increased health care consolidation in September 2013.
Goodlatte blamed the Affordable Care Act for the increase in health care mergers. "Without question, the enactment of Obamacare has prompted increased consolidation in the health care industry," he said.
Rep. Tom Marino, R-Pa., added that since Congress passed the law, "we have seen one negative impact on the healthcare industry after another."
The Senate Judiciary Antitrust Subcommittee is also scheduled to hold a hearing in September to discuss the mergers and their effects on health care industry competition.
"If each of the recently announced transactions is completed, the number of major health insurers in the United States would shrink to three," said Judiciary Antitrust Subcommittee Chairman Sen. Mike Lee, R-Utah. "It is imperative that we closely examine changes in the health care market, and what has caused these changes, to ensure that consumers are not harmed and continue to receive quality health care at a competitive price."
While such hearings cannot derail health care company mergers, they can help shape public opinion about a deal and potentially put more pressure on the regulatory agencies reviewing the combinations.
House and Senate hearings on cable company Comcast Corp's unsuccessful attempt to acquire Time Warner Cable Inc. featured criticism from Democrats and Republicans.
Regulators this year indicated they would block the deal, prompting Comcast to abandon the transaction.