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Competition in Health Insurance (Antitrust)

Discover the AMA's position on health insurance mergers and why the AMA believes fewer insurance carriers undermine physician practices and harm patient care.
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High insurance market concentration is a vital issue of public policy. On Nov. 11, 2015, the AMA urged the U.S. Department of Justice (DOJ) to block the proposed Anthem-Cigna and Aetna-Humana health insurance mergers. The AMA believes that high insurance market concentration is a vital national concern because the anticompetitive effects of the merged insurers’ exercise of market power pose a substantial risk of harm to patients in terms of health care access, quality and affordability.

There already is an unprecedented lack of competition in most health insurance markets. If the number of national health insurance carriers reduces from 5 to 3, the effects could lead to:

  • Increased prices instead of greater efficiency or lower health care costs
  • Limited patient choice
  • Compromised physician-patient advocacy
  • Undermined access and quality due to physician payments below competitive levels

Reasons to Reject the Mergers

The AMA believes that further consolidation creates an environment detrimental to providing lower prices, better quality and greater choice for patients.

  • It is very difficult for competing insurers to expand into, or enter, a highly concentrated market, which means that the mergers would likely permanently reduce competition.
  • Peer-reviewed literature suggests consolidation leads to increased price, less incentive to offer broader networks and lack of competitive pressure to respond to patients’ access needs.
  • DOJ found in earlier cases that the health insurer monopsony (buyer power) acquired through the proposed mergers likely lowers the quality and quantity of physician services.
  • When mergers result in monopsony power and physicians are reimbursed at below competitive levels, the adverse effects on patients may include physicians:
    • Spending less time with patients to meet practice expenses.
    • Having reduced ability to invest in practice infrastructure that could improve patient care and accelerate transition to new value-based payment and delivery models.
    • Retiring early or seeking more rewarding opportunities outside of medicine, at a time when there is already significant shortage of primary care and specialty physicians.
  • There is no evidence supporting the contention that the proposed mergers would lead to greater efficiencies or innovative payment and care management programs.

Explore Advocacy Efforts

In addition to discussing the anticompetitive effects of the proposed mergers with key congressional members, the AMA also:

Reducing Antitrust Barriers to Physician Engagement in New Payment and Delivery Models

The AMA has also urged the Federal Trade Commission (FTC) and the DOJ to remove antitrust obstacles that prevent physicians from forming clinically integrated networks to increase patient choice and improve quality of care. The trend toward value-based reimbursement provides an important opportunity to modernize antitrust guidelines that allow patients and physicians to make informed choices driven by individuals’ health care needs.

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