Had your fill of the courtroom drama surrounding the proposed merger of Anthem and Cigna? Well, now it’s time for the drama surrounding the proposed merger of Aetna and Humana, another instance where the Justice Department charges that such a move violates antitrust law. Humana is one of the largest Medicare Advantage (MA) providers so it wasn’t surprising that lawyers focused on just how the merger would affect MA, according to the Wall Street Journal.
It wouldn’t be good for beneficiaries. Aetna also offers MA plans, Justice Department lawyer Craig Conrath pointed out. The competition between the two helps improve quality and control costs. That would be lost in 350 counties where the insurers now compete head-to-head.
Humana owns 18% of the MA market, according to the Kaiser Family Foundation. Only UnitedHealthcare has a bigger presence, at 21%. Aetna has 7% of the market.
Ah, but the government is forgetting about the competition from traditional Medicare, countered Aetna lawyer John Majoras. And don’t forget that about 10,000 people become Medicare eligible every day. Two reasons that a combined Aetna-Humana would have to offer competitive products in competitive markets.
Decisions are expected in January for both the Anthem-Cigna proposal, as well as the Aetna-Humana deal.
Source: Wall Street Journal