CT approval of Aetna-Humana merger draws fire

Aetna headquarters in Hartford

Aetna

Aetna headquarters in Hartford

Updated at 5:30 p.m. with comments from the state Insurance Department.

Washington – Opponents of the proposed Aetna-Humana merger on Thursday blasted the state Insurance Department for approving the deal, saying it was “rubber stamped” without public input, and asked the department to reopen the case.

“The commissioner of insurance has failed to live up to her fiduciary duty to protect consumers, employees, the community and shareholders in rubber stamping this deal in the dark of the night,” said Tom Swan, executive director of the Connecticut Citizen Action Group. “She had tools to make this more public and to protect jobs in Connecticut – she has failed to use them and this is unconscionable.”

Insurers maintain the mergers will result in greater efficiencies, saving patients money.

Connecticut is one of 20 states required to sign off on the Aetna-Humana deal. It, and 14 other states, have already given their approval.

“We completed the review with no objection,” Connecticut Insurance Department spokeswoman Donna Tommelleo said on Wednesday.

In a statement released Thursday, the Insurance Department said that on Jan. 22 it “made the determination that the proposed acquisition would not substantially lessen competition or create a monopoly in Connecticut as Humana has a small market footprint in this state.”

The statement also said the department hired an economist to help with its analysis. It said it did not hold a public hearing because none was required since “Connecticut does not have a domestic Humana Insurer” and a “change of control application” was not required.

Seventeen Connecticut state lawmakers wrote to Insurance Commissioner Katharine Wade in a letter dated May 13, asking for public hearings on mergers, “allowing for maximum public participation.” The lawmakers also wanted Wade to commission a study of the impact of mergers on access to health care and jobs in the state and to grant “intervenor status” to consumer advocates during a review of the proposed mergers.

The lawmakers, led by state Rep. Gregory Haddad, and Swan’s group belong to a coalition of interest groups and state lawmakers that has coalesced around the proposed Aetna-Humana merger and another one planned by Cigna and Anthem.

On Thursday, coalition members asked Wade to reopen the Aetna-Humana review process.

The mergers would consolidate the U.S. health insurance market from five major insurers to three.

Matthew Katz, CEO of the Connecticut State Medical Society, a member of the coalition, predicted that if the proposed mergers are approved by state regulators and the Justice Department, about 64 percent of the Connecticut would be controlled by one company – Anthem-Cigna.

“The Connecticut State Medical Society is deeply disappointed to learn of the CID’s secretive approval of the Aetna-Humana merger,” Katz said. “We are deeply concerned about the lack of access to care and rising costs for Connecticut patients that will result from the merger of insurance giants Aetna and Humana.”

Antitrust regulators can impose conditions on mergers such as divestitures of business in markets where there would be too much concentration.

The Connecticut Campaign for Consumer Choice, another member of the coalition, also sharply criticized the Connecticut Insurance Department for its approval of the proposed Aetna-Humana merger.

The campaign was created and is backed by the York Hospital Association and SEIU 1199 United Healthcare Workers East, a union representing employees in hospitals, clinics, and other health centers. The group is working to oppose the mergers in four states besides Connecticut.

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