The two highest ranking Democrats on the House and Senate Insurance Committees today called for public hearings on the potential mergers of four of the five national health insurance companies in the United States. State Rep. Heather Bishoff (D-Blacklick) and State Sen. Edna Brown (D-Toledo) were joined by a mother with a child with asthma in requesting that the Ohio Department of Insurance (ODI) hold public hearings on any proposed mergers.
“I believe there is a lack of awareness of these mergers and an incomplete picture on how they would affect the marketplace in Ohio,” said Brown. “We’re concerned that a shrinking of the market may cause premiums to increase, choice to decrease and quality of care to suffer. But, first we need to get the facts to make sure we are protecting Ohio consumers and businesses.”
Ohio law gives ODI broad powers to investigate insurance mergers fully, including the authority to hold public hearings to assess the competitive impact of a health insurance merger. The department can block mergers it deems “unfair or unreasonable to policyholders of the domestic insurer and not in the public interest.”
“There are no studies or evidence that shows us that insurance mergers lead to lower prices for consumers,” said Bishoff. “That’s why we need public hearings to bring in experts to tell us how these mergers might impact Ohio consumers and businesses, and ensure we can provide our constituents with the information they need to determine what these mergers will mean to them.”
All four insurers involved in the potential mergers – Anthem with Cigna and Aetna with Humana – offer various products in Ohio. The three current largest commercial insurers for health insurance for individuals, small groups and large groups enroll 84 percent of all Ohioans.
The National Association of Insurance Commissioners found that Anthem Blue Cross Blue Shield, formerly known as WellPoint, is the largest insurer in the state. The Anthem-Cigna merger alone could eliminate competition for commercial insurance products in Steubenville, Cincinnati, Columbus, Lima, Dayton and Sandusky.
The mergers could also limit choices for Medicare supplemental insurance, leading to higher premiums. A July 2015 study by the Center for American Progress found that the proposed Aetna and Humana merger could potentially impact the Medicare Advantage market. The combined company would serve more than one quarter of the Medicare Advantage beneficiaries. In Ohio, Aetna and Humana compete with other Medicare Advantage plans in 35 counties. Aetna’s average plan premiums are $302 lower in counties where Humana offers a Medicare Advantage plan. If these companies merge, competition in these counties will decrease and could raise prices for Medicare Advantage plans throughout Ohio.
“Competition between health insurers is essential to ensuring lower premiums, improving quality of care, and promoting access and choice, and the proposed mergers between these dominant insurers could substantially lessen competition for millions of consumers in Ohio,” said David Balto, an attorney working nationally on the issue. “The Ohio Department of Insurance should utilize all of its powers, including conducting public hearings, to thoroughly evaluate the impact of these mergers.”
In February 2016, national and local organizations sent a letter to the Ohio Department of Insurance requesting the state agency hold public hearings on the mergers to determine their full impact on Ohio consumers and businesses. Hearings have been held in other states to contribute to the investigations currently underway at the federal level, at the Federal Trade Commission and the U.S. Department of Justice, and the U.S. Congress has also heard testimony on the potential mergers.