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Cigna-Anthem Merger Would Harm Consumers, Competition

To the Editor:

Missouri’s largest physician and hospital organizations took notice of Rep. Eric Burlison’s suggestion (Mailbag, June 28) that the proposed merger of health insurance giants Anthem and Cigna could benefit Missouri consumers. While he raises some interesting points, a widely-embraced and very different viewpoint contends that the merger would significantly reduce insurance market competition and create, for the newly-combined enterprise, an unhealthy concentration of market power here, all to the detriment of the public.

Between 2010 and 2013, the state of Missouri suffered the fourth largest decline in health insurance competition levels in the nation, a situation the proposed Anthem-Cigna merger would only worsen. U.S. Department of Justice and Federal Trade Commission merger guidelines demonstrate that the major metropolitan markets in Missouri, including Rep. Burlison’s hometown of Springfield, would suffer highly concentrated, anti-competitive market forces if the merger is allowed to proceed.

An analysis by the Henry J. Kaiser Family Foundation shows that Missouri is one of only five states in which Anthem already has at least a 33 percent share in the individual, small group and large group insurance markets. More specifically, in 21 of 28 Missouri metropolitan statistical areas, Anthem and Cigna would combine to hold more than one third of the total market share. And, in 23 of the MSAs, the merger would create a presumptively anti-competitive market.

The same holds true in rural Missouri. Under federal metrics, Anthem and Cigna combined would control more than one third of the total market share in 44 out of 59 rural counties. In 49, the merger would create a presumptively anti-competitive market, and in two others it would result in a highly concentrated market.

It is well established that a lack of competition in any given market is not in the best interest of the consumer. But a lack of competition in the health insurance marketplace impacts individuals not only as consumers, but also as patients, with the added risk of their health and well-being. Higher premiums, higher out-of-pocket costs, stifled innovation, narrow provider networks, and reduced access to care follow in the absence of healthy competition. Conversely, marketplace choices inspire innovation and motivate competing insurers to lower premiums, enhance customer services, reduce costs and improve the quality of care.

A combined Anthem and Cigna health insurance behemoth would eliminate choice, erode healthy competition and raise the spectre of a host of adverse outcomes for Missouri patients. Competition, not consolidation, is the desired goal for the insurance marketplace.

Herb B. Kuhn
Missouri Hospital Association
President and CEO

Tom Holloway
Executive Vice President
Missouri State Medical Association