Here are five notes:
1. David Dranove, PhD, a healthcare economic professor at Chicago-based Northwestern University, said the merger would yield higher prices and worse care in many metropolitan areas and states.
2. During his testimony, Dr. Dranove challenged Anthem’s stance that smaller, regional insurers would be sufficient competition to keep prices low if the deal came to fruition. Dr. Dranove said, “If you have a highly concentrated market and you have a merger, you go from bad to worse.”
3. Dr. Dranove said the Anthem-Cigna deal would serve to physicians and hospitals’ detriment, as they would lose leverage. With fewer payers in the marketplace, providers may not be able to reject an insurer if they do not reimburse them sufficiently for various services. The American Medical Association and the American Hospital Association have both opposed the merger due to concerns over lower reimbursements.
4. On Dec. 20, 2016, Jonathan Orszag, an economist and principal of the Chicago-based consulting firm Compass Lexecon, said the payers have different targets — Humana on Medicare Advantage and Aetna on commercial group insurance policies. Therefore, Mr. Orszag says the two payers are well matched for such a deal.
5. Mr. Orszag also said the deal would not limit choices for seniors as they can still opt for fee-for-service Medicare, as opposed to the MA market. He also said CMS regulates both programs and therefore the government “is setting the terms for competition.”
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