Hospitals, insurers spar over healthcare mergers

Hospitals, insurers spar over healthcare mergers
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Health insurers are firing back at hospitals on Friday after a leading hospital group sent a letter to the Department of Justice this week sounding the alarm about insurance company mergers.

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The American Hospital Association (AHA) on Wednesday wrote to the DOJ’s antitrust division, raising concerns about two major recently proposed health insurance company mergers: one between Anthem and Cigna and the other between Aetna and Humana.

Those are four of the five biggest health insurers in the country, and would bring the number of major national health insurance players down from five to three (UnitedHealth is the other major company).

The hospitals warned that the insurance deals could have a “profound” effect on “access, affordability, and innovation.”

America’s Health Insurance Plans (AHIP), the insurer trade group, responded on Friday. It said insurers are looking to keep coverage affordable through negotiating lower medical bills, and shifting to a system of paying for quality over quantity.

The insurers then turned the tables back on hospitals.

“That drive to deliver better value for patients is being undercut by years of anticompetitive hospital consolidation that have forced patients to pay higher health care costs, increased premiums, and limited their health care choices,” Beth Leonard, AHIP’s executive vice president of public affairs, said in a statement.

There has been debate about how much of a role ObamaCare plays in the insurance company mergers.

Senate Majority Leader Mitch McConnellMitch McConnellTop Dem: Congress may need brief funding extension McConnell meets with Trump's Commerce pick Citizens United still undermines democracy; here’s why MORE (R-Ky.) has portrayed mergers as “the inevitable result of Obamacare’s push toward consolidation as doctors, hospitals, and insurers merge in response to an ever-growing government.”

The hospitals brought up another part of ObamaCare, the medical loss ratio (MLR), which requires insurers to spend at least 80 percent of their revenue from premiums on medical costs, as opposed to profit or overhead.

That insurers have to deal with an MLR is no excuse for easing up on antitrust laws, the hospitals said.

The AHA said ObamaCare is focused on making insurers compete to bring down prices, a goal that mergers could impair.