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Clinton voices concerns over insurance mergers

Following a recent wave of mergers in the insurance industry, Democratic presidential candidate Hillary Clinton is raising “serious concerns” about the potentially harmful impact of these deals on consumers. She nodded specifically to the projected effects of the proposed Anthem-Cigna merger on New Hampshire’s insurance market.

What are the mergers, and how does this affect NH?

Consolidation among health care companies has been a particularly hot topic as of late, following two major deals announced in recent months: one involving insurance giants Anthem and Cigna, another involving Humana and Aetna.

The $48 billion Anthem-Cigna merger is poised to create the largest health insurer in the country, covering some 53 million patients, according to the Associated Press. These companies were already two of the largest players in New Hampshire’s insurance market, and this deal is expected to allow them to wield even more power in the state. Combined, the two insurers cover two-thirds of New Hampshire's total market.

The $37 billion merger between Humana and Aetna — approved by shareholders just this week — would create the second-biggest managed care company in the country, according to the AP.  

According to the most recent report from the New Hampshire Insurance Department, Aetna customers made up about 7.5 percent of the state’s insurance market in 2012. 

Both the Anthem-Cigna and Aetna-Humana mergers require further federal approval before they are finalized.

Sara Plourde

Speaking on the issue Wednesday, Clinton called for heightened scrutiny from the federal officials who oversee these and other insurance mergers. She also vowed, if elected, to step up oversight over such deals — to “strengthen the antitrust enforcement arms of the Department of Justice and the Federal Trade Commission” and to put “aggressive” regulators in place to monitor these issues. Clinton’s campaign did not provide additional specifics at this time on how, exactly, she plans to go about strengthening federal enforcement efforts.

Clinton also warned that one of the deals “could raise market concentration in New Hampshire to excessive levels,” referring to the findings of a recent report from the American Medical Association. As reported by the Concord Monitor, the AMA found that the merger would significantly reduce competition in New Hampshire’s insurance market.

“I strongly support delivery system reforms and care coordination that drive innovation, value and quality at an affordable cost for Americans and that improve transparency about prices – but companies proposing to merge bear the heavy burden of demonstrating that consumers will benefit,” Clinton said.

Why do these mergers  matter to NH?

As previously reported, the new Anthem-Cigna merger is expected to cover about 410,000 New Hampshire residents —or about 65 percent of the state’s insurance market. And New Hampshire has a history of being relatively uncompetitive when it comes to insurance, even before this merger.

Given the issue’s local relevance, Clinton’s senior policy team has also reached out to New Hampshire “providers, health care policy and delivery system experts, and stakeholders to learn more about the issues New Hampshire faces and to collect feedback on how best to address market concentration here,” spokeswoman Julie McClain said Wednesday.

The Clinton campaign declined to specify all of the groups and individuals who were involved in those policy discussions, citing concerns from some of the individuals about being publicly connected to the campaign because of their jobs. The campaign did signal that they spoke with Ned Helms, a former state Department of Health and Human Services commissioner who endorsed Clinton earlier this year.  

This isn’t the first time that Clinton has spoken out on the issue of insurance mergers. As reported by Bloomberg in September, Clinton hinted that she was paying close attention to the issue when unveiling a larger health care plan last month. At the time, she pledged to “vigorously enforce antitrust laws to scrutinize mergers and ensure they do not harm consumers” as president. In an op-ed published on the news website Quartz earlier this week, the candidate again nodded to concerns about an increased concentration of power within the insurance industry.

Why single out the insurance companies?

Beyond the issue’s local significance in New Hampshire, where Clinton is trying to win over primary voters, there are other reasons why a candidate might feel comfortable targeting the insurance industry. As the Washington Post pointed out in response to Clinton's comments, the decision to push back on these companies isn’t a particularly risky one from a public perception standpoint. 

More than half of those surveyed in a recent Kaiser Family Foundation poll held an “unfavorable” view of insurers. The insurance companies ranked only slightly higher than pharmaceutical companies and oil companies, but lower than airlines, banks, food manufacturers and doctors.

Credit Kaiser Health Tracking Poll, August 2015

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