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insurance mega-mergers. 117 The AMA fears the proposed insurance mergers “would end competition in key markets and erode patient care.” 118 The decline in competition not only has the potential to impact the quality of care but the cost implications associated with the lack of competition also threaten the health care industry on a larger scale. The ACA’s effectiveness in achieving high-quality, low-cost care is based on availability of competition in the market and collective bargaining amongst providers and payors. 119 The intent and main provisions of the ACA hinge on “well-functioning competitive markets in order to provide the intended benefits to consumers.” 120 There are several tools for assessing the concentration of a market, and the potential effects of a merger. The Herfindahl-Hirschman Index (HHI) is one such measure that is commonly used to assess market concentration. 121 Markets that are less concentrated are more competitive. 122 In looking at the impact of competition on the individual exchange markets, a 2014 study found that after a large national insurer decided not to participate, premiums increased more than five percent that year. 123 Another study found that having one additional insurer in a geographic area could save individuals nearly $500 in premiums per person. 124 The AMA found that the current health insurance market was deemed as “highly concentrated” in nearly seventy-five percent of U.S. metropolitan areas based on federal guidelines used to assess market competition. 125 These mergers could reduce competition in at least 817 relevant geographic markets, serving forty-five million consumers. 126
117. Ana Radelat, AMAAsks Justice Departmentto Block Aetna-Humana, Anthem-Cigna Mergers, CT MIRROR (Nov. 12, 2015), http://ctmirror.org/2015/11/12/ama-asks-justice- department-to-block-aetna-humana-anthem-cigna-mergers/. 118. Id. 119. Dafny, supra note 22. 120. Julie Brill, Competition in Health Care Markets, HEALTH AFF. (Jan. 26, 2015), http://healthaffairs.org/blog/2015/01/26/competition-in-health-care-markets/. 121. U.S. DEP’T. OF JUS., Herfindahl-Hirschman Index, (July 29, 2015), https://www.justice.gov/atr/herfindahl-hirschman-index. 122. Mary Mahon, New Report: Little or No Competition in Medicare Advantage Insurance Markets in 97% of U.S. Counties, COMMONWEALTH FUND (Aug. 25, 2015), http://www.commonwealthfund.org/publications/press-releases/2015/aug/little-competition- in-medicare-advantage. 123. Leemore Dafny et al., More Insurers, Lower Premiums: Evidence from Initial Pricing in the Health Insurance Marketplaces, AM. J. HEALTH ECON. 1, 53–81 (2015). 124. Michael J. Dickstein et al., The Impact of Market Size and Composition on Health Insurance Premiums: Evidencefromthe First Yearofthe Affordable Care Act, 105 AM. ECON. REV. 120 (May 2015). 125. Courtney Baird, Top Healthcare Stories for 2016: Insurance Company Mergers, COMM. FOR ECON. DEV. (Feb. 16, 2016), https://www.ced.org/blog/entry/top-healthcare- stories-for-2016-insurance-company-mergers. 126. AHA Letter to DOJ, supra note 90.