Updated at 8:32 p.m. Wednesday.

The American Medical Association in a letter has asked the U.S. Department of Justice to block mergers of Anthem and Cigna as well as Aetna and Humana.

ama-logoIn the 17-page-letter, delivered to Assistant Attorney General William Baer on Wednesday, the AMA outlines its “significant concerns with respect to the impact on consumers in terms of health care access, quality and affordability.”

Aetna wants to buy Louisville-based Humana for $37 billion. Shareholders of both companies have approved the deal. The DoJ is reviewing it to make sure it has no significant negative impact on consumers.

In the letter, signed by Dr. James L. Madara, the AMA asked that the DOJ block the mergers “to protect consumers from premium increases, lower plan quality and a reduction in the quantity and quality of physician services.”

Madara wrote that:

  • “the proposed mergers are occurring in markets where there has already been a near total collapse of competition.”
  • “A growing body of peer-reviewed literature suggests that greater health insurer consolidation leads to price increases, as opposed to greater efficiency or lower health care costs.”
  • “The proposed mergers can be expected to lead to a reduction in health care quality.”
  • The mergers would increase the health insurers’ buyer power and would “likely degrade the quality and reduce the quantity of physician services.”
  • “Physicians may be forced to spend less time with patients … (and) hindered in their ability to invest in new equipment, technology, training, staff and other practice infrastructure that would improve the access to and quality of patient care.”

While both Aetna and Humana have said their merger would improve access to and quality of health care through greater efficiencies, Madara wrote that “there is no evidence supporting (that) claim.”

“Fostering competition, not consolidation, benefits American consumers through lower prices, better quality and greater choice,” Madara wrote.

The AMA said it based its assessments in part on information from congressional hearings, data the association compiled on health insurance competition, recent studies and expert testimony.

The Aetna/Humana merger, the AMA said, would affect more than 1,000 counties, “a staggering number of markets,” and would “exacerbate the near total collapse of competition in commercial markets.”

If prior mergers are any indication, the AMA said, allowing the proposed mergers to go through would harm consumers.

“If past is prologue,” the AMA quotes Leemore Dafny, a professor at Northwestern University, “insurance consolidation will tend to lead to lower payments to healthcare providers, but those lower payments will not be passed on to consumers.

“On the contrary,” Dafny said, “consumers can expect higher insurance premiums.”

Aetna told Insider Louisville in an emailed statement that it believes the merger “will improve the health care system and offer consumers more choices and greater access to higher quality, more affordable care. Our proposed transaction is primarily about the Medicare marketplace, where there is robust competition and choice.”

“We are confident that our transaction will receive a fair, thorough and fact-based review from the Department of Justice and the states,” Aetna said.

Humana could not be reached Wednesday afternoon.

Boris Ladwig
Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.