The states likely to be hit hardest by health insurer mergers

Analysis from Leavitt Partners researchers estimates deals' effect on market concentration
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Since the major payer mergers were announced, many have debated whether or not they will damage competition in the health insurance market. But to truly evaluate how the deals will play out, it may be most effective to analyze their effects at the state level.

To measure this, Leavitt Partners researchers Douglas Hervey, David Muhlestein and Austin Bordelon used the Herfindahl-Hirschman Index to compare pre- and post-merger commercial insurance and Medicare Advantage concentrations across all 50 states and the District of Columbia. They detail the results of their analysis in a post on the Health Affairs Blog.

Georgia, Connecticut, Colorado, Virginia and New Hampshire are likely to experience the greatest rise in commercial insurance concentration, according to the analysis, as they could face increases of 30 percent or higher. For commercial administrative services-only plans, Georgia, Florida, Connecticut, Colorado and California are expected to see the greatest increases in market concentration, driven primarily by the Anthem-Cigna merger.

In the Medicare Advantage sector, the researchers note that the Aetna-Humana merger will be the major driver of consolidation. This effect is likely to be strongest in Kansas, Alaska, Iowa, Ohio and Missouri, all of which could experience market concentration growth of 50 percent or higher, the analysis found.

Neither the Aetna-Humana, Anthem-Cigna, nor Centene-Health Net mergers are likely to greatly impact the Medicaid managed care market, the researchers add, as Kentucky is the only state that will see a double-digit percentage increase in concentration. Still, all three mergers are likely to strengthen the combined companies' respective Medicaid businesses.

Though it remains to be seen how the mergers, if approved, will ultimately affect consumers, Hervey, Muhlestein and Bordelon write that overall, "most healthcare payer markets will be highly concentrated." Given this possibility, consumer advocates and antitrust experts have pushed for state insurance regulators to scrutinize the deals. The American Medical Association, meanwhile, recently asked federal regulators to block the mergers, saying a "growing body of peer-reviewed literature" suggests they will harm consumers. The merging insurers' chief executives, though, have outlined the positive effects of the mergers in congressional hearings and in press interviews.

To learn more:
- here's the blog post

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