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Let’s Block Too-Big-To-Fail Insurance Mergers

By LeeAnn Hall and Wendell Potter

This article was originally published in Roll Call.

If you thought too-big-to-fail banks were dangerous, watch out for too-big-to-fail health insurance companies.

This summer, the country’s top insurers announced a spate of merger plans, lighting up the business pages nationwide. Health insurance giant Anthem unveiled its intention to absorb competitor Cigna, while Aetna put in a bid for Humana — mergers that, if approved, will cut the country’s big insurers down from five to just three. Add to these proposals Centene’s plan to scoop up Health Net, and it looks like a feeding frenzy.

The bad news is that we’re the bait.

On Sept. 29, the House Judiciary Committee brought company CEOs into a hearing on the deals. There, committee members raised questions not only about competition, but also about the impact of such mergers on both affordability and quality of care.

Meanwhile, the health insurance companies have put their PR in high gear.

In prepared testimony, Anthem CEO Joseph Swedish claimed the merger is about “complementary platforms” and “better value.” But this kind of lingo can’t hide what the proposals are really about: They are not about making quality care more affordable, but about amassing profits in an industry where companies such as Anthem boast profits of $2.5 billion or more a year.

We certainly shouldn’t buy the argument that bigger-than-ever health insurance companies will make our health insurance better or more affordable. If insurance giants grow even larger, we can expect premiums to rise — not go down. Take the example of UnitedHealth’s purchase of Nevada’s Sierra Health Group, triggering premium increases 13.7 percent greater than they would have been without the merger.

There’s also the risk that insurers will squeeze more doctors, hospitals and other providers out of their networks, adding extra hassles and costs for patients. This danger is even higher for those living in low-income communities or rural areas where it’s already hard to find doctors.

As the Sierra example shows, there’s nothing new about insurance company mergers. Anthem attained “megaplan” status 11 years ago when it snapped up WellPoint.

As a result, in many of our cities and towns, a small group of insurers — or even just one — has a real grip on the market. A recent American Medical Association report found a high concentration of insurance markets in 72 percent of metropolitan areas studied, with a single insurer claiming 30 percent of more of market share in 90 of these areas.

Yet, neither the House nor the Senate has a say in these deals. That’s why we need the Department of Justice and our state watchdogs — whether attorneys general or insurance regulators — to take action against these proposals.

Halting the mergers would be consistent with the Affordable Care Act, which gives us the tools to change the terms of competition among health insurance companies. Before the ACA, insurers competed for “good risk” — meaning covering people who were young and healthy and dumping anyone with higher health care needs. Now they can’t turn you down or charge you more for a pre-existing condition. But that doesn’t mean that they’re not still driven by the quest for profits and will try to bend or mold the rules to bolster those profits.

Health Insurer Lobbying, Sopranos Style

It’s been public knowledge for a while now that the health insurance industry secretly funneled money to the US Chamber of Commerce to fund its smear campaign against health care reform in 2009. What we didn’t know, though, was just how much money. Now, thanks to some good investigative reporting by Bloomberg News, we do. And the magic number is… $86.2 million. Read more

Insurance Companies to Stop Covering Kids October 1st

The Secretary of the Department of Health and Human Services (HHS), Kathleen Sebelius, recently announced a national coalition dedicated to enrolling five million children in Medicaid and CHIP within five years. “Nothing is more important to our future than the health of our children. No child should have to skip a doctor’s appointment or go without the medicine they need because their family can’t pay,” said Secretary Sebelius. The Connecting Kids to Coverage Challenge is one symbol of the Obama administration’s commitment to the health of children in America.

“That’s great,” you may say, “but it’s pretty easy to prioritize health care for kids. Who wouldn’t want to make sure children are healthy?”

Good question. The answer is private health insurance companies. Read more