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Physician groups ask Florida attorney general to block Aetna-Humana merger

February consent order for merger flawed in argument that regulation can be a substitute for competition, AMA states.

Susan Morse, Managing Editor

The American Medical Association, the Florida Medical Association and the Florida Osteopathic Medical Association are calling on Florida Attorney General Pam Bondi to reject the proposed merger of health insurer giants Aetna and Humana, according to a March 14 release from the AMA.

The anti-competitive consequences of the merger would negatively affect healthcare access, quality and affordability in Florida, the  physician organizations said in the March 11 letter from American Medical Association CEO and Executive Vice President James Madara, MD. AMA analysis found the merger would run afoul of federal antitrust guidelines in highly populated metropolitan areas in Florida, he said.

Nineteen of Florida's metropolitan areas have two health insurers with at least a 50 percent share of the commercial health insurance market, according to AMA analysis.

The letter follows a Feb. 11 consent order by the Florida Office of Insurance Regulation approving, with conditions, Aetna's acquisition of Humana's affiliates in the state.

[Also: Florida regulators approve Aetna's acquisition of Humana's Florida-based affiliates]

Conditions included Aetna expanding its operations in underserved counties, broadening operations on the federally facilitated marketplace into five new counties by 2018, and providing a plan for statewide expansion by 2020, according to the consent order.
However, the consent order relies on flawed arguments that regulation can be a substitute for competition, the letter states.

"The OIR (Office of Insurance Regulators) appears to have been captured by Aetna's faulty arguments that existing state and federal regulation … mostly solve the competitive concerns and justify very limited remedies that are largely illusory," the letter states.

In making its decision, insurance regulators in Florida also erroneously concluded that Medicare Advantage is not a relevant product market when they stated the federal government's traditional Medicare program is in direct competition with Medicare Advantage, Madara said.

[Also: 15 states join probe of Cigna, Aetna health insurance mergers]

"Unfortunately, in shaping its remedies, the OIR erroneously deferred to the role of regulation in health insurance as a substitute for lost competition," he said. "Accordingly, we respectfully request that your office protect competition by blocking the merger."

Aetna's proposed $37 billion deal to acquire Humana, as well as Anthem's proposed $54 billion deal to take over Cigna, are currently under federal review by the U.S. Department of Justice.

Aetna and Humana shareholders approved the proposed acquisition in October 2015.

Twitter: @SusanJMorse