Aetna and Humana Merger A Bad Deal For Texas, Physicians Warn

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“……if Aetna and Humana are allowed to merge, the new company would gain control of 36 percent of Texas’ health insurance market……..physician groups especially could be negatively affected by a merger as they could end up with “very little negotiating leverage to allow them to secure favorable pricing terms.”

By Scott Bailey

San Antonio Business Journal

The Texas Medical Association, the largest state medical society in the nation, is urging federal officials to put the brakes to a pending merger two major insurers — Aetna Inc. and Humana Inc. TMA officials contend that such a merger would reduce competition and potentially raise health insurance premiums.

In addition, the association, which represents more than 48,000 physician and medical student members, has warned the U.S. Department of Justice Antitrust Division that the pending merger also creates concerns about anticompetitive effects in the Texas Medicare Advantage insurance market.

Dr. Joseph Valenti, who chairs TMA’s Council on Socioeconomics, has reached out to the DOJ, providing data the organization claims shows a merger would give the new insurance company “enhanced market power” in several Texas cities — including San Antonio.

Valenti wrote in a letter to the DOJ that, if Aetna and Humana are allowed to merge, the new company would gain control of 36 percent of Texas’ health insurance market. The possible ramifications of such market control have not been lost on Texas physicians.

Valenti wrote that many smaller physician groups especially could be negatively affected by a merger as they could end up with “very little negotiating leverage to allow them to secure favorable pricing terms.”

TMA officials contend that the unfettered price-setting power that will result from an Aetna-Humana merger could force physician practices out of business.

 

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