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providers strive to acquire the size necessary to effectively negotiate within the post-ACA’s hyper-regulatory environment, but the implications of this arms race are threatening to various stakeholders and the market as a whole. 104
A. Threats to Consumers
In addition to concerns relating to lower-provider reimbursement rates and stand-alone practitioners, recent insurance mergers pose a threat to consumers. While insurance companies argue consolidation will lead to more efficiency and therefore decreased prices, this is only true if achieved cost savings are passed through to consumers through lower premiums and lower out-of-pocket costs. 105 When pressed in the Senate hearing last fall, neither the CEO of Aetna nor Anthem could offer “a single piece of evidence demonstrating that health insurance mergers would create efficiencies, or that they would pass along any savings to consumers.” 106 There are serious concerns that many of the benefits touted by insurers may not actually materialize under the mergers and even if they do consumers will only see marginal benefits. 107 Instead of speculating on why prices may increase under insurance mergers, one only needs to look to prior outcomes to ascertain that insurance mergers did in fact raise premiums. 108 In analyzing the 2008 merger of UnitedHealth and Sierra and the 1999 merger of Aetna and Prudential, two separate studies confirmed that insurers raised consumers’ premiums post- merger. 109 The retrospective study of Aetna-Prudential, conducted by Leemore Dafny, a health economist at Northwestern University and a former regulator at the Federal Trade Commission, concluded that “health insurer
104. Scott W. Atlas, Under Obamacare, Hospitals Merge, Doctors Merge, and Patients Pay More for Less, NAT’L REV. (Nov. 25, 2015, 4:00 AM), http://www.nationalreview.com/ article/427601/obamacare-health-care-costs-consumer-choice-consolidation. 105. Michael J. McCue & Mark Hall, What’s Behind Health Insurance Rate Increases? An Examination of What Insurers Reported to the Federal Government in 2012–2013, COMMONWEALTH FUND (Dec. 19, 2013), http://www.commonwealthfund.org/publications/ issue-briefs/2013/dec/health-insurance-rate-increases. 106. David Balto, Health Insurance Mergers Fact Check: Why Consumers Will Lose, HUFFINGTON POST (Nov. 10, 2015), http://www.huffingtonpost.com/david-balto/health- insurance-mergers_b_8521708.html; cf. Dafny, supra note 22 (noting that studies of hospital pricing based on geographic areas tend to show that hospital prices are lower in geographic areas with higher levels of insurance market concentration). 107. Paul von Ebers, Mega Health Insurance Mergers: Is Bigger Really Better?, HEALTH AFF. BLOG (Jan. 22, 2016), http://healthaffairs.org/blog/2016/01/22/mega-health-insurance- mergers-is-bigger-really-better/. 108. Balto, supra note 106. 109. Id.