Like MAG, consumer groups opposing Anthem/Cigna and Aetna/Humana mergers

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The following letter and comments were submitted to the Georgia Department of Insurance (DOI) on behalf of Consumer Action, Consumers Union, Consumer Federation of America, U.S. Public Interest Research Group, and Consumer Watchdog on June 28...

• Under Georgia law, the Commissioner can disapprove a merger if it would substantially lessen competition in insurance or tend to create a monopoly. These mergers and the market shares that would result from them are well above the prima facie anticompetitive thresholds.

• The mergers would result in substantial loss of competition in the individual insurance market. A combined Anthem-Cigna would possess 29.6% market share, and a combined Aetna-Humana would possess 58% market share. In the small group market, Anthem-Cigna would have 33% market share, and Aetna-Humana would possess 49% market share.
 
• These mergers would also lead to a loss of competition in the large group insurance market. Anthem-Cigna and Aetna-Humana would control about two-thirds of the market. And in the ASO market, Anthem-Cigna would possess 71% market share. Finally, in Medicare Advantage Aetna has 9% market share and Humana has 22%, so together they would possess 31% of Georgia's MA market.

• The mergers would result in the loss of potential competition in Medicare Advantage. Additionally the merging companies have committed numerous consumer protection violations, and consumers needed assurances that these problems have been solved.

• Consumers will pay higher premiums as a result. Georgians are already facing increased costs; Humana has also requested a 65.2% average premium increase for individual plans on Georgia's health exchange in 2017. When health insurers merge, there is almost always an increase in premiums.

• The merging companies claim that these deals will lead to efficiencies and benefit consumers. However, they have offered little evidence to support these claims, and there is no evidence that benefits are passed on to consumers. California Commissioner Dave Jones noted that the companies have repeatedly failed to provide information about any such benefits.

• Divestitures are an inadequate solution and usually fail to restore competition or protect consumers. However, the Georgia Office possesses broad power to enact other remedies to protect consumers.

The groups plan to testify at the DOI hearings on the Aetna/Humana merger to be held at 9 a.m. on Tuesday, July 26 at the Georgia Department of Insurance, Suite 916, in the West Tower of the Floyd Building at 2 Martin Luther King Jr. Drive in Atlanta.

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