2016 Health Insurer Merger Frenzy 117
sincere concerns over the preservation of the benefits of competition for beneficiaries that the program was designed to bring.146
III. EVALUATING MERGER SUCCESS UNDER ANTITRUST LAWS
The Federal Trade Commission (FTC) and the Antitrust Division of the DOJ share responsibility at the federal level for antitrust regulation and enforcement.147 State attorneys general and insurance commissioners are also charged with enforcement of antitrust laws and the evaluation of potential antitrust violations.148 Healthcare consolidation has become a focus of antitrust scrutiny, with pressure coming from both the FTC and DOJ in recent years.149 Antitrust laws were created to protect consumers through the mechanisms of competition in the marketplace.150 The collection of antitrust laws create a framework to ensure that strong incentives exist for businesses to keep quality up and prices down, while operating efficiently.151
A. Antitrust Laws
Traditionally, antitrust scrutiny has focused on provider and pharmaceutical mergers, particularly given the insurance industry’s antitrust exemption through the McCarran-Ferguson Act.152 The McCarran-Ferguson Act was passed in 1945 as a response to a Supreme Court ruling153 finding that the business of insurance fell within interstate commerce and was
146. Id. 147. FED. TRADE COMM’N, GUIDE TO ANTITRUST LAWS: THE ENFORCERS, https:// www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/enforcers (last visited Mar. 15, 2015) [hereinafter FTC, THE ENFORCERS]. 148. Id. 149. Richard B. Benenson & Kerry J. LeMonte, FTC’s Focus on Healthcare Mergers and Consolidation, 45 Colo. Lawyer (Feb. 2, 2016), http://www.bhfs.com/Templates/ media/files/news/CoLawyer2_ 1_ 16.pdf; Joe Carlson, Report Shows FTC’s Focus on Healthcare, MODERN HEALTHCARE (June 13, 2012), http://www.modernhealthcare.com/ article/20120613/NEWS/306139960. 150. The Sherman Act was the first measure passed by Congress to prohibit monopolies in interstate commerce and passed in response to public opposition to monopolies formed following the Civil War. The Act passed almost unanimously with a 51-1 vote in Senate and unanimous vote in the House. Sherman Antitrust Act of 1890, SOC’Y FOR HUMAN RES., https://www.shrm.org/legalissues/federalresources/federalstatutesregulationsandguidanc/pag es/ shermananti-trustactof1890.aspx (last visited Apr. 9, 2016). 151. FTC, THE ENFORCERS, supra note 147. 152. 15 U.S.C. §§ 1011 et seq. 153. United States v. South-Eastern Underwriters Ass’n, 322 U.S. 533 (1944) (members of an insurance association were indicted on charges of violating the Sherman Act by fixing rates and monopolizing the insurance business in a multiple states; lower court held the business of insurance was not commerce but on appeal, the Supreme Court reversed holding that the insurance industry was an appropriate subject for federal regulation under commerce clause and therefore subject to Sherman Act).