With the end of the 2016 General Assembly session, Virginians are receiving updates from their legislators about our accomplishments. What Virginians are not hearing about is our failure to expand Medicaid for many of the commonwealth’s 400,000 most vulnerable patients — or what we plan to do to prevent the impending mergers of four of the nation’s largest health insurers from driving up premiums for all Virginians and the cost of doing business in Virginia.
But make no mistake, both of these issues should have everyone concerned.
The failure to expand Medicaid raises serious questions about what is happening in our health care system. Thanks to unfounded resistance among conservative legislators to billions of dollars of federal monies, 30,000 new Virginia jobs and $180 million per biennium of immediate savings to Virginia taxpayers, and the willingness of hospitals to pay a fee, hundreds of thousands of Virginians will continue to fall into a significant coverage gap.
With no new proposals to otherwise address the issue, these individuals remain in no man’s land, neither poor enough to qualify for Medicaid, nor earning high enough incomes to qualify for subsidies to purchase coverage under the Obamacare health insurance exchanges. This increases the likelihood they must rely on emergency care rather than preventive medicine, driving up costs for everyone.
With the multibillion-dollar mergers of Aetna-Humana and Anthem-Cigna on the horizon, it is not surprising that a broad range of Virginia consumer groups wrote to Virginia’s Insurance Commissioner raising the alarm on the potential risks of these mergers. Past mergers have severely limited innovation among insurers, such as shopping, mobile health applications and price transparency resources.
Similar mergers have driven up consumer costs. Previous research indicates premium increases typically follow mergers between health insurance companies. In fact, mergers between Aetna-Humana and Anthem-Cigna will undoubtedly reduce competition in the Virginia marketplace. We cannot afford to let this happen without intense scrutiny.
The majority of Virginia residents and businesses do not have many insurers to select from and choices will grow smaller if these massive mergers are approved. The Virginia Bureau of Insurance is Virginia’s consumer watchdog and we must ensure the bureau is doing its job to safeguard Virginians’ rights to health care and closely monitor the mergers. As conservative lawmakers frequently advocate, cost control created by a vibrant free market drives down costs in many lines of business.
The benefits to the companies are clear. Modern Healthcare has reported that if Anthem were to acquire Cigna, combining the second- and fourth-largest insurance companies, the deal would be valued at $54.2 billion. The price of the Aetna-Humana deal, merging the third- and fifth-biggest insurance companies, will be about $35 billion, according to the Associated Press.
Less clear is how the mergers will help Virginians. History proves to us that massive mergers have not had positive outcomes for consumers. Previous mergers of leaders in other industries are one indicator. Virginians have seen what happens when airlines and drug companies consolidate: Far from shrinking bills for consumers, these deals paved the way for them to skyrocket.
It is too late for the Medicaid expansion bill this session. But we can still take action on the insurance mergers. That is why hearings and public review processes for both of these mergers are needed.
The recent announcement of a public hearing for the proposed merger between Anthem and Cigna is a start, but we need to do more. Ensuring vibrant competition requires robust examination and Commissioner Jacqueline Cunningham and the Bureau of Insurance must provide true oversight and an open assessment.
The way our commonwealth evaluates these mergers will determine whether Virginia is prepared for the impact. Consumers should have a voice in the process. It’s time to bring accountability into the mix, or we risk losing consumer options and falling victim to decreased consumer choice options and rising costs.