Let's Block Too-Big-to-Fail Health Insurance Companies | Commentary

If you thought too-big-to-fail banks were dangerous, watch out for too-big-to-fail health insurance companies.

This summer, the country’s top insurers announced a spate of merger plans, lighting up the business pages nationwide. Health insurance giant Anthem unveiled its intention to absorb competitor Cigna, while Aetna put in a bid for Humana — mergers that, if approved, will cut the country’s big insurers down from five to just three. Add to these proposals Centene’s plan to scoop up Health Net, and it looks like a feeding frenzy.

The bad news is that we’re the bait.

On Sept. 29, the House Judiciary Committee brought company CEOs into a hearing on the deals. There, committee members raised questions not only about competition, but also about the impact of such mergers on both affordability and quality of care.

Meanwhile, the health insurance companies have put their PR in high gear.

In prepared testimony, Anthem CEO Joseph Swedish claimed the merger is about “complementary platforms” and “better value.” But this kind of lingo can’t hide what the proposals are really about: They are not about making quality care more affordable, but about amassing profits in an industry where companies such as Anthem boast profits of $2.5 billion or more a year.

We certainly shouldn’t buy the argument that bigger-than-ever health insurance companies will make our health insurance better or more affordable. If insurance giants grow even larger, we can expect premiums to rise — not go down. Take the example of UnitedHealth’s purchase of Nevada’s Sierra Health Group, triggering premium increases 13.7 percent greater than they would have been without the merger.

There’s also the risk that insurers will squeeze more doctors, hospitals and other providers out of their networks, adding extra hassles and costs for patients. This danger is even higher for those living in low-income communities or rural areas where it’s already hard to find doctors.

As the Sierra example shows, there’s nothing new about insurance company mergers. Anthem attained “megaplan” status 11 years ago when it snapped up WellPoint.

As a result, in many of our cities and towns, a small group of insurers — or even just one — has a real grip on the market. A recent American Medical Association report found a high concentration of insurance markets in 72 percent of metropolitan areas studied, with a single insurer claiming 30 percent of more of market share in 90 of these areas.

Yet, neither the House nor the Senate has a say in these deals. That’s why we need the Department of Justice and our state watchdogs — whether attorneys general or insurance regulators — to take action against these proposals.

Halting the mergers would be consistent with the Affordable Care Act, which gives us the tools to change the terms of competition among health insurance companies. Before the ACA, insurers competed for “good risk” — meaning covering people who were young and healthy and dumping anyone with higher health care needs. Now they can’t turn you down or charge you more for a pre-existing condition. But that doesn’t mean that they’re not still driven by the quest for profits and will try to bend or mold the rules to bolster those profits.

The DOJ and state regulators are our first line of defense in protecting the gains we’ve made under the ACA. As the former head of DOJ’s Antitrust Division Christine Varney said in 2010, “if health care reform is to harness the power of competitive markets,” antitrust enforcers “must be up to the challenge of ensuring that our health care markets are, in fact, as competitive as possible.”

But strong antitrust enforcement alone isn’t enough. Nationally and in each of our states, we also need to use all the tools the ACA gives us to make health insurance truly affordable and accountable. Right now, we’re leaving too many of these options and others on the table.

Using those tools would mean adopting vigorous rate review and setting high standards for insurers that want to sell coverage through the new state and federally-sponsored marketplaces. Most of all, it would mean adding public coverage as an alternative for people shopping in these marketplaces.

Our experience with too-big-to-fail banks taught us a powerful lesson: The worst course of action is to put our fate in the hands of an industry that protects its bottom line above its customers and the country as a whole.

The good news is that we have the tools to fight back against too-big-to-fail health insurance companies. Let’s put those tools to use.

LeeAnn Hall is the executive director of the Alliance for a Just Society. Wendell Potter is a senior analyst at the Center for Public Integrity. He is a former health insurance industry executive who now advocates for health system reform. He is the author of “Deadly Spin: How Corporate PR Is Killing Health Care.”

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