You are hereHome >
This week, in a big win for consumers, a district court took action to block the proposed merger between health insurance giants Anthem and Cigna. This decision follows a ruling last month that blocked the proposed merger of two more of the nation’s biggest for-profit health insurers, Aetna and Humana. These decisions come after months of work by US PIRG and a broad coalition of consumer and health care groups, urging close scrutiny of the mergers from state and federal regulators and raising questions and concerns about the potential impact of the mergers.
These decisions will help preserve competition in health insurance markets, which is especially critical in light of some insurers dropping coverage in some parts of the country over the past year. When markets are uncompetitive, health insurers are less likely to push hard to keep down costs, improve care and improve customer service. When consumers have fewer options, those options tend to be worse and more expensive. Had these mergers gone through, only three major nationwide health insurers would have remained in business, substantially decreasing health insurance market competition across the country.
In making the case for the mergers, the insurance companies argued that consolidation would benefit consumers by enabling these health insurers to cut costs through administrative efficiencies, and by pushing a harder bargain with health care providers. Unfortunately, there’s no evidence that bigger is better when it comes to health insurance. Past insurance mergers have generally led to higher, not lower premiums, and research has shown that large insurers tend to hike premiums even more than their smaller competitors.
Although it makes sense that a larger insurer would be able to negotiate lower prices with health care providers, the problem is that health insurers generally haven’t shared those savings with their members. If big health insurers were held accountable for keeping their rates reasonable and sharing cost savings with their members, mega-mergers would be less concerning for consumers. But without such assurances, blocking these mergers is clearly the right course of action.
We applaud the decisions to block these mergers and urge the Department of Justice to continue their close scrutiny of consolidation in health care.
 For an example of coverage of our work in Missouri, the first state to take action against the mergers, see http://www.stltoday.com/business/local/consumer-groups-want-transparency-during-final-review-of-aetna-humana/article_eeaf9901-798f-5720-a2a9-2b2103d0e4f7.html
 See, e.g., Wang E & Gee G. “Larger Issuers, Larger Premium Increases: Health insurance issuer competition post-ACA.” Technology Science, August 11, 2015. Available at http://techscience.org/a/2015081104/index2.php
Your donation supports Illinois PIRG’s work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.