A national group of doctors says that if Anthem and Cigna are allowed to merge it would limit competition in the private health insurance market in Connecticut.
A report by the American Medical Association released Wednesday found that the health insurance merger would lead to increased premiums, make it more difficult for physicians to negotiate with insurers, and narrow provider networks for consumers.
“We find that the majority of U.S. commercial health insurance markets are highly concentrated,” the report found. “These markets are ripe for the exercise of health insurer market power, which harms consumers and providers of care.”
The report concluded that the Anthem-Cigna merger would diminish competition in 121 metropolitan areas located throughout the 14 states where Anthem is licensed to provide commercial coverage, including: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.
Nine of these 14 states, including Connecticut, are working to block the Anthem-Cigna merger. States that have yet to take an antitrust position on the merger include: Indiana, Kentucky, Nevada, Ohio and Wisconsin.
The AMA which is strongly opposed to the merger said the proposed Aetna-Humana merger would also lead to highly concentrated market share in private insurance markets in other states, but not Connecticut. Humana only offers Medicaid supplemental plans in Connecticut.
However, Anthem already has a large segment of the market in Connecticut, including more than 56,700 customers in the individual market. It also provides plans for most of Connecticut state government employees and retirees and businesses.
Sarah Yeager, a spokeswoman for Anthem, said there’s nothing new in this report that AMA hasn’t already said. She said the report “does not reflect the actual facts regarding Anthem’s acquisition of Cigna.”
“Together, Anthem and Cigna, who have limited overlap in a highly competitive industry, will be in a better position to improve consumer choice and quality,” Yeager added. “Most of all, we will be better able to lead the transition to value-based care that will reduce costs while improving health outcomes.”
The AMA’s report is based on market information from 2014. It used the Herfindahl-Hirschman Index to gauge market concentration.
The report found Connecticut has an HHI of 2,493. If the merger between Anthem and Cigna were allowed to proceed it would raise the index to 3,788. Anything above 2,500 on the index is considered “highly concentrated.”
The U.S. Department of Justice and attorneys general from multiple states, including Connecticut, recently sued to block the acquisitions. Connecticut Attorney General George Jepsen announced in July that he was joining the effort to block the merger after concluding it would “substantially lessen competition for the provision of healthcare insurance services.”