Without addressing recent conflict-of-interest allegations against state insurance regulators, Connecticut’s senior senator wrote Wednesday that the U.S. Department of Justice should deny the mergers of Aetna with Humana and Anthem with Cigna.
“These mega-mergers have potentially far-reaching and severely harmful effects on Connecticut, but they raise issues of national importance as well,” U.S. Sen. Richard Blumenthal wrote. “Very simply these mammoth mergers are job killers. They threaten jobs, hike prices, lessen choices, and lower healthcare quality.”
Blumenthal’s letter Wednesday to Deputy Assistant Attorney General Renata Hesse of the Antitrust Division encouraged the department to deny the mergers. The U.S. Department of Justice will have the final say on whether either merger violates U.S. antitrust laws.
U.S. Sens. Al Franken, D-MN, Elizabeth Warren, D-MA, Sherrod Brown, D-OH, Edward J. Markey, D-MA, Dianne Feinstein, D-CA, and Mazie K. Hirono, D-HI, also signed the letter.
According to Blumenthal, the Anthem-Cigna merger will make some of Connecticut’s health insurance markets almost 70 percent more concentrated than they currently are—leaving them more than three times above the level DOJ considers “highly concentrated.” As a result, this merger is almost certain to drive up premiums, drive down health care quality, and increase costs for Connecticut’s consumers and businesses.
The Aetna-Humana merger, according to Blumenthal, poses a real threat to jobs in Connecticut. While Aetna has said Humana’s Kentucky workers’ jobs are safe in light of the proposed merger, they have repeatedly refused to offer the same assurances for workers in Connecticut.
Cigna declined comment on Blumenthal’s letter and Humana never returned requests for comment.
A spokesman for Aetna said they believe the combined company “is in the best interest of consumers,” and they will “continue to cooperate with the Department of Justice on its thorough review of the transaction.”
A spokeswoman for Anthem said they will continue to work closely with members of Congress to answer their questions.
“Together, Anthem and Cigna have limited geographical and product segment overlap,” Sarah Yeager, an Anthem spokeswoman, said.
“Anthem operates as the Blue Cross and/or Blue Shield licensee in only 14 states and will continue to market Cigna products in the rest of the country in competition with Blue Cross Blue Shield plans, as it does today. For example, Anthem already competes in our non-Blue service areas as Amerigroup in states like Tennessee and Texas, as CareMore in Arizona, and as SimplyHealth in Florida. Cigna products will not become Anthem BCBS products in states where we do not have a Blue license and a significant portion of Cigna revenue is not covered under the specific BCBS requirements.”
To date, the Anthem-Cigna merger has received regulatory clearance in 12 states. Twenty-eight states have an opportunity to review the merger.
Connecticut is one of four states to approve the Aetna-Humana merger. The merger will go through some type of regulatory review in 20 states.
The impact of these proposed mergers on competition “is unacceptable and illegal,” Blumenthal said.
Blumenthal said after the Aetna-Prudential merger, premiums rose 7 percent and health insurance costs to consumers increased by $34 billion.
However, he declined several times to answer questions about Connecticut’s role in the regulatory review process.
Connecticut’s Insurance Commissioner Katharine Wage, a former Cigna employee, has been asked by advocates to recuse herself from reviewing the Anthem-Cigna merger. The Citizen’s Ethics Advisory Board has agreed to issue a ruling on whether Wade’s review of the merger violates the state Code of Ethics.
“I have no comment on the state regulatory process,” Blumenthal said. “My review is based on federal law and the impact on consumers and patients and businesses in Connecticut.”