DOJ suggests insurance mega-mergers warrant careful scrutiny

AHA News Now

Testifying yesterday at a Senate Judiciary subcommittee hearing on antitrust enforcement oversight, the assistant attorney general for antitrust at the Department of Justice suggested that the proposed mergers of Aetna and Humana and Anthem and Cigna demand careful scrutiny to protect consumers. “Without getting into the merits of any views regarding the two pending transactions before us, these are transformational mergers in a number of markets including Medicare Advantage and commercial insurance, where we’ll be going from five national providers down to three,” Assistant Attorney General William Baer told the Subcommittee on Antitrust, Competition Policy and Consumer Rights. “That is a game changer that demands merger law enforcement officials to scrutinize very, very carefully to make sure we aren’t making a mistake in which shareholders benefit and the consumers pay the cost.” He was responding to concerns raised by Senate Judiciary Committee Chairman Charles Grassley (R-IA). Sen. Richard Blumenthal (D-CT) said prior health insurance merger cases point to the “futility and the failure of divestiture as a remedy,” and the need to “view the market as a whole, not the mergers separate and distinctly.” Baer said, “Whenever you have two major transactions in an already concentrated industry occurring roughly at the same time, one needs to look at the interaction between two transactions and look down the road. It also affects one’s view of whether or not one or both transactions are really fixable.” In testimony last September, AHA told the subcommittee that the proposed mergers “merit the closest scrutiny from the Department of Justice’s Antitrust Division and Congress.”

Topic: Advocacy and Public Policy
Tags: mergers, Coverage, antitrust

Keyword Search