Consumer watchdogs have criticized the state insurance commissioner’s decision to approve the Aetna-Humana merger without a public hearing, saying it deprived Kentuckians of a chance to voice their concerns.
Hartford, Conn.-based health insurance company Aetna wants to buy Louisville-based Humana for $37 billion. Shareholders of both companies have approved the deal, but before it can be completed the companies must get consent from the 18 states in which they operate and from the U.S. Department of Justice.
While Kentucky’s immediate past insurance commissioner, Sharon P. Clark, told IL in October that she did not foresee any kind of competition problems in the state as a result of the merger, she was planning to hold a public hearing on the matter this spring.
Her successor, Brian Maynard, told IL Tuesday via email that he does not believe such a hearing is needed, saying it would have been an “unnecessary formality.”
Consumer watchdogs contacted by IL disagreed.
Jim Waters, president of the Lexington-based Bluegrass Institute, said Maynard is telling people to trust him on his examination of the merger documents but is not giving the public an opportunity to verify his conclusions.
Kentucky law states that the commissioner “shall approve any merger or other acquisition … unless, after a public hearing, the commissioner finds that” the merger would lessen competition or harm consumers.
A Department of Insurance spokeswoman told IL via email that the law “requires the commissioner to approve a merger, unless the commissioner can prove at a public hearing that the merger does not meet the standards of (the law). After conducting the review of the filings, it was concluded that the merger met the standards of (the law). Therefore, it could not be proven at a public hearing that the merger did not meet the standards of (the law).”
“This statement is just amazing to me,” Waters said. “This is definitely circular reasoning.”
Waters emphasized that he could not speak about the merits of Maynard’s decision but said that the commissioner is doing himself and Kentuckians a disservice by not holding a public hearing.
Richard Beliles, state chair of Common Cause Kentucky, which advocates for a transparent and accessible government, agreed.
“The public needed to know more about this huge transaction,” Beliles said. “I just don’t think it’s in the public interest.”
Jenn Topper, spokeswoman for the Washington, D.C.-based Sunlight Foundation, said the commissioner’s decision left the public out of the process.
“It’s disappointing that, after planning to hold a hearing, the commission changed its course, making a decision on behalf of the public without its input,” Topper told IL via email.
Carmen Balber, executive director of Santa Monica, Calif.-based Consumer Watchdog, told IL via email that her organization has urged public hearings in the states where Humana and Aetna do business “because of the significant impact the … merger could have on health insurance affordability and quality.”
“Aetna has claimed savings from the merger, but in the past premiums have gone up after health insurance mergers, not down,” Balber said. “Aetna-Humana have given no guarantee that it will be different this time.”
Humana has told IL that “the combined company will offer a broader choice of products and services, access to higher quality and more affordable care and a better overall experience in more locations around the country.”
Balber said, “The citizens of the state deserve one public hearing where they get to examine the insurers’ claims about the impact of the merger, and what the department of insurance has done to investigate,” she said. “I’m surprised a new commissioner would reverse direction and refuse to hold a public hearing to discuss these issues in the light of day.”
Maynard could not be reached Friday, but his office told IL last week that the commissioner made his decision “after thorough review by internal financial staff and outside economists.”
Maynard was appointed last month by Kentucky’s new Gov. Matt Bevin. According to the Kentucky Department of Insurance, Maynard has worked in the industry for 30 years, including 16 in the industry and 14 on the regulatory side. Maynard graduated from the University of Louisville with a degree in accounting and has worked as a contract examiner for Kentucky since 2004.