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Doctor group asks regulators to block health insurer mergers

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(Bloomberg) — The American Medical Association (AMA) asked U.S. antitrust regulators to block two proposed mergers that could reshape the health insurance industry.

Anthem Inc. (NYSE:ANTM) shouldn’t be permitted to buy Cigna Corp. (NYSE:CI), and Aetna Inc. (NYSE:AET) should be blocked from acquiring Humana Inc. (NYSE:HUM), the lobbying and professional organization for physicians said in a letter Wednesday to the head of the Justice Department’s antitrust division.

The AMA, as well as the American Hospital Association (AHA), have been critical of the proposed deals, saying they will reduce competition and could harm patient care. If approved, the deals would shrink the ranks of the biggest health insurers to three from five, potentially reducing options for private Medicare policies and coverage purchased by employers for their workers.

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“Fostering competition, not consolidation, benefits American consumers through lower prices, better quality, and greater choice,” James Madara, the AMA’s chief executive officer, said in the letter, which was sent to Assistant Attorney General William Baer.

“Our analyses of the proposed health insurance mergers reveal significant concerns with respect to the impact on consumers in terms of health care access, quality, and affordability,” Madara said.

Controlling costs

Anthem said its deal with Cigna will improve consumer choice and quality and help keep down costs for patients.

“Some AMA members may fear that a combined Anthem-Cigna will be able to negotiate lower rates for their services —even though that could translate to lower prices for consumers,” Anthem said by e-mail. “Providers play a critical role in our health care system, and they share responsibility for keeping health care affordable.”

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Aetna said in an e-mail that combining with Humana would “offer consumers more choices and greater access to higher quality, more affordable care. Our proposed transaction is primarily about the Medicare marketplace, where there is robust competition and choice.”

The other health insurers declined to comment or didn’t respond. The companies have said in the past that the deals will benefit consumers and help them provide better insurance products.

The DOJ has yet to sign off on the deals, which were announced in July. Anthem agreed to pay about $48 billion in cash and stock for Cigna, and Aetna said it would pay about $35 billion for Humana.

Mark Abueg, a Justice Department spokesman, declined to comment on the letter.

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