Anthem-Cigna, Aetna-Humana mergers would squeeze commercial insurance market, AMA study claims

Humana's Louisville headquarters.

The proposed mergers between Anthem-Cigna and Aetna-Humana would create incredibly powerful insurers, but the lack of a competitive market would lead to lower payments to physicians and  higher premiums for patients, according to a study released this week by the American Medical Association

The study found the Anthem-Cigna merger would diminish competition in 121 metropolitan areas located in all of the 14 states where Anthem is licensed to provide commercial coverage: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia and Wisconsin.

The Aetna-Humana merger would diminish competition in 57 metropolitan areas in 15 states, including: Arizona, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Ohio, Tennessee, Texas, Utah, West Virginia and Wisconsin.

[Also: DOJ files motion to get hostile Anthem, Cigna letters]

"The AMA analyses show that the Anthem-Cigna and Aetna-Humana mergers would significantly compromise market competition in the health insurance industry and threaten healthcare access, quality and affordability," said AMA President Andrew W. Gurman, MD.

The analysis is based on data from the 15th edition of Competition in Insurance: A Comprehensive Study of U.S. Markets.

The analysis of current market concentration shows: 93 percent of HMO (health maintenance organization) markets are highly concentrated; 87 percent of PPO (preferred provider organization) markets are highly concentrated; 100 percent of POS (point-of-service) markets are highly concentrated; and 95 percent of exchange markets are highly concentrated.

In terms of market shares, the study found that in 40 percent of metropolitan areas, one insurer had a combined HMO, PPO, POS and exchange market share of 50 percent or greater.

[Also: Aetna, Humana fire back at feds over DOJ attempt to block merger]

In 64 percent of the metro areas, one insurer had an HMO market share of 50 percent or greater; in 59 percent of the metro areas, one insurer had a PPO market share of 50 percent or greater; in 86 percent of the metro areas, one insurer had a POS market share of 50 percent or greater; and in 75 percent of the metro areas, one insurer had an exchange market share of 50 percent or greater.

The AMA supports the Department of Justice decision to block both mergers over antitrust concerns. The Anthem-Cigna trial goes to court on November 21 and the Aetna-Humana merger heads to court on December 5.

Twitter: @SusanJMorse