Dec. 15, 2015
A proposed supersize merger in the Texas health
insurance market raises concerns about fewer health care options and higher
costs for patients, according to Texas Medical Association’s
(TMA’s) Texas Medicine magazine.
Aetna seeks to acquire Humana Inc. in a deal
focused largely on buying up Humana’s Medicare Advantage business. If the $37
billion Aetna-Humana merger is approved, the newly combined entity would have a
significant impact across Texas — and 13 other states — likely enhancing Aetna’s
market power to concerning levels per the federal government’s own standards, according to a comprehensive American
Medical Association (AMA) analysis. Aetna and Humana stand among the top five
commercial payers in Texas, along with Health Care Service Corporation (the
parent company of Blue Cross and Blue Shield of Texas), United Healthcare, and
Cigna. (Cigna is part of another proposed merger of health insurance giants, as
Anthem Inc. looks to take over the carrier for $50 billion.) Already, health
insurance markets in Texas and across the country are highly concentrated into
the hands of a few plans. The new Aetna-Humana entity would control nearly
three-quarters of the private HMO insurance market in Houston, and 36 percent
of the Medicare Advantage market across Texas, according to AMA.
Based on similar health insurance mergers over the past
20 years, TMA physicians worry Texas patients would encounter a shrinking choice
of doctors within their health insurance networks, and higher insurance
premiums and deductibles. Physicians assert any supposed benefits would come
at doctors’ and patients’ expense in the form of take-it-or-leave-it payment
contracts and take-it-or-leave-it insurance premiums, because the proposed new
health insurance giant’s dominant commercial insurance market share would wield
all control. Doctors therefore no longer would be able to negotiate contracts beyond
accepting or not accepting whatever the insurer offered. That “really affects the quality
and availability of care because physicians are disempowered to be effective
advocates for our patients,” said Houston neurologist William Gilmer, MD. He
said he already feels that squeeze. “It goes without saying it’s dominated and
completely monopolized by big health plans here.”
The Aetna-Humana merger would increase the combined
company’s power in Texas as a whole and in several commercial market segments,
according to a TMA breakdown of AMA data.
Using U.S. Department of Justice (DOJ) and Federal Trade
Commission antitrust and horizontal merger guidelines to analyze the merger,
the consolidation would be considered likely to enhance market power:
- In the El
Paso, San Antonio, and Corpus Christi metropolitan areas for the combined
HMO, PPO, and point-of-service plan markets;
- In the
Houston-Sugar Land-Baytown, Austin-Round Rock, and San Antonio
metropolitan areas for the HMO market; and
- In the El
Paso, San Antonio, Houston-Sugar Land-Baytown, Corpus Christi, Fort
Worth-Arlington, Austin-Round Rock, Victoria, and Killeen-Temple-Fort Hood
metropolitan areas for the PPO market.
The merger also would raise significant competitive
concerns in more than a dozen other areas of the state.
Joseph S. Valenti, MD, chair of TMA’s Council on
Socioeconomics and a Denton obstetrician-gynecologist, authored a letter on behalf of TMA to DOJ opposing
the Aetna-Humana deal.
“Bigger isn’t always better. Bigger means less
competition. And less competition usually means higher prices. We’ve already
seen in a lot of places it certainly doesn’t mean lower prices. Meanwhile, the
only things not going up are patients’ coverage and physician reimbursements,”
Dr. Valenti said.
The Aetna-Humana merger will go through a lengthy
federal approval process, and if cleared, would not complete until the end of
TMA is the
largest state medical society in the nation, representing more than 48,000
physician and medical student members. It is located in Austin and has 110
component county medical societies around the state. TMA’s key objective since
1853 is to improve the health of all Texans.
Contact: Brent Annear (512) 370-1381;
cell: (512) 656-7320; email: brent.annear[at]texmed[dot]org
Marcus Cooper (512) 370-1382; cell: (512) 650-5336; email: marcus.cooper[at]texmed[dot]org
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