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Director of Va. Consumer Voices for Healthcare, Public Interest Attorney, Deliver Testimony at SCC Anthem-Cigna Hearing


From Virginia Consumer Voices for Healthcare:

RICHMOND – Today, Karen Cameron, Director of Virginia Consumer Voices for Healthcare, and David Balto, public interest antitrust testified at the State Corporation Commission public hearing for pending $54.2 billion merger of Anthem-Cigna. They were joined in their call for greater transparency and public education by advocates and consumers from Virginia Organizing, the Virginia Hospital and Healthcare Association, and the Medical Society of Virginia.

On May 3, twelve Virginia elected officials sent a letter to Insurance Commissioner Jacqueline K. Cunningham, urging her to make the evaluation of the Anthem-Cigna and Aetna-Humana mergers “more open and accessible to all Virginians.” Previously on January 11, David Balto submitted testimony on behalf of Consumers Union, Virginia Consumer Voices for Healthcare, The Commonwealth Institute, US PIRG, SEIU Virginia 512, Virginia Organizing, Consumer Action, Consumer Watchdog, Virginia Rural Health Association, and DC 37 Health & Security Plan outlining consumer concerns about the Aetna-Humana and Anthem-Cigna mergers.

As Virginia SCC weighs this decision, states around the country are taking action to evaluate all of the proposed health insurance mergers. Today, Missouri insurance officials rejected the proposed merger of Aetna-Humana, citing the anticompetitive nature of the companies if they merged.

A section of David Balto’s SCC testimony is below.

“Consumers benefit most when competitors have to roll up their sleeves and develop a better product.  If one of these firms has a better product in one area, then all other companies in the market should have to learn how to do better to compete against that product.  It does not benefit consumers for companies to consolidate simply to fill in their weaknesses.

There is also no evidence or scholarly studies showing that insurance mergers lead to savings for consumers.  In fact, as previously noted, evidence indicates that health insurance mergers lead to higher consumer costs, not increased consumer savings. Acting Associate Attorney General Bill Baer from the DOJ’s Antitrust Division raised questions regarding the alleged cost efficiencies that would result from health insurance mergers. Baer noted that ‘consumers do not benefit when sellers . . . merge simply to gain bargaining leverage.’”

Sections of Karen Cameron’s SCC testimony are below.

“We are here today to give a voice to Virginia’s healthcare consumers, several of whom have contacted us over the last few months to tell us about their concerns relative to the increased growth and market dominance of insurance companies, particularly Anthem in Virginia. Virginia’s relatively limited regulatory requirements and/or oversight authority that could limit any potential predatory rates, inaccurate practices, or limited networks do not mitigate these concerns.”

“With so many questions and so little clarity on the impact of the merger on Virginia’s consumers, we urge caution and complete due diligence in your review of this significant change to Virginia’s health insurance market.”

  • From the Virginia Hospital & Healthcare Association (VHHA):

    During a Virginia State Corporation Commission (SCC) hearing today, Virginia Hospital & Healthcare Association (VHHA) leadership delivered testimony in opposition to the proposed merger of Anthem Inc. and Cigna Corporation. Below is a statement regarding VHHA’s position. A letter VHHA submitted to the SCC is attached.

    “The combination of these two major insurers would have negative consequences for insurance policy holders and the public. News that another state, Missouri, rejected a proposed merger of two other major insurers coincidentally arrived as today’s hearing happened. The consequences of such a merger for Virginia and Virginians include a strong likelihood of premium cost hikes, and markedly less interest by insurers in partnering with health care providers and consumers on innovations to positively transform health care. Virginia health systems continue to focus on innovation to enhance patient care, quality, and value, and have partnered with struggling rural hospitals to protect public access to essential health care services. Coinciding with that period of transformation has been an era of historic lows in overall health care spending trends. Over the past decade or so, growth in national health care expenditures has declined, and there has been a correspondingly steady drop in the annual rate of hospital price increases. Unfortunately, large insurers in Virginia have repeatedly demonstrated an unwillingness to join in efforts to innovate to enhance health care value and access. The history of insurance consolidation stands in contrast to the strong evidence of downturn in overall health care costs and hospital price trends, as well as quality improvements that have coincided with provider integration. For these reasons, the Medical Society of Virginia, representatives of consumer and patient advocacy groups, and employers and other insurance purchasers have joined VHHA in opposing the proposed merger.”