Washington – Sen. Richard Blumenthal and six other Democrats on the Judiciary Committee asked the Justice Department on Wednesday to block two proposed mergers involving Connecticut health insurers, Aetna-Humana and Anthem-Cigna.
“We are deeply concerned by the detrimental impact that both of these mergers would have on premium prices, jobs and health care costs for consumers and businesses,” the senators said in a joint statement.
The Justice Department’s Antitrust Division is reviewing the mergers.
In a letter to Renata Hesse, the head of the DOJ’s Antitrust Division, the lawmakers said history shows mergers cause job losses and the trend in health insurer consolidation has resulted in higher premiums for consumers.
Sens. Al Franken, D-Minn.; Elizabeth Warren, D-Mass.; Sherrod Brown, D-Ohio; Edward Markey, D-Mass.; Dianne Feinstein, D-Calif., and Mazie Hirono, D-Hawaii, joined Blumenthal, D-Conn., in signing the letter.
Aetna’s response to the congressional opposition to the deals was measured.
“We believe a combined company is in the best interest of consumers, and we continue to cooperate with the Department of Justice on its thorough review of the transaction,” said Aetna spokesman T.J. Crawford.
Anthem spokeswoman Sarah Yeager said “we will continue to work closely with all members of Congress to answer their questions.”
She also said “together, Anthem and Cigna has limited geographical and product segment overlap, operates as the Blue Cross/Blue Shield licensee in only 14 states and will continue to market Cigna products in the rest of the country in competition with Blue Cross/Blue Shield plans.
“Anthem continues to have a productive ongoing dialogue with federal and state regulators regarding the merits of this compelling combination,” Yeager said.
The Connecticut Insurance Department, which is also reviewing the Anthem-Cigna merger, had no comment.
The mergers would shrink the nation’s five biggest health insurers to three. The insurers say there will still be plenty of competition, and consolidation would bring about efficiencies that result in lower premiums and better health care delivery. But Blumenthal and his Democratic allies on this issue don’t think so.
“These mega-mergers are job killers. They threaten jobs, hike prices, lessen choices, and lower health care quality,” Blumenthal said. “Combining five competitors into three epitomizes the type of anti-consumer deal that the law forbids. I strongly support steps to help these insurers succeed and expand here in Connecticut, so they can do more business and more hiring here. We need them – as thriving, independent competitors.”
He also said the Anthem-Cigna merger will make some of Connecticut’s health insurance markets almost 70 percent more concentrated than they currently are —leaving them more than three times above the level DOJ considers “highly concentrated.”
Blumenthal also said the Aetna-Humana merger poses a “real threat to jobs in the state.”
He said while Aetna has said Humana’s Kentucky workers’ jobs are safe in light of the proposed merger, they have repeatedly refused to offer the same assurances for workers in Connecticut.
In a teleconference with two other opponents of the merger, Matthew Katz, CEO of the Connecticut State Medical Society, and Tom Swan, executive director of the Connecticut Citizens Action Group, Blumenthal cited job losses in the state because of previous insurance mergers, including 800 jobs lost when Aetna merged with United Healthcare.
Katz said he shared Blumenthal’s concerns.
“(The mergers) could result in the collapse of the medical delivery system in Connecticut,” Katz said.
Blumenthal had urged the Justice Department to consider the mergers together.
“Which in fact they are doing,” he said.
Certain states, including Connecticut, also must also approve the mergers. Blumenthal, however, declined several times to address the controversy surrounding Connecticut Insurance Commissioner Katharine Wade’s role as the lead state regulator on the Anthem-Cigna merger.
Wade is a former Cigna lobbyist whose husband still works for the company, but she declined to recuse herself from reviewing the merger. The state ethics office, which ruled she did not have to, has recently opened an investigation into whether there is a conflict of interest.
Blumenthal said he is limiting his efforts to the federal review of the mergers and “the decision about the state review should be limited to state authorities.”
When asked if a letter from a senator from a state where two of the insurers are domiciled would have special impact on the Justice Department, Blumenthal answered, “I hope it will.”
The senator also said he has met with representatives of the heath insurers “a number of times over the course of the past year”
“They’ve been extremely helpful and informative and cooperative,” he said.