Dive Brief:
- An analysis by the Center for American Progress (CAP) suggests the pending acquisition of Humana by Aetna would cause premiums to rise on their Medicare Advantage plans.
- With Humana controlling 19% of the Medicare Advantage market and Aetna controlling 7%, a merger would make the combined company the largest provider of the plans, with 26% of the total market, Reuters reports, resulting in less competition in the Medicare Advantage market.
- CAP did not make a recommendation on whether to block the deal but wrote "...they should be stopped absent clear and compelling evidence that they will benefit consumers."
Dive Insight:
The CAP analysis focused on the issue of decreased competitin in the Medicare Advantage market. It noted that in counties where the two companies currently compete, Aetna's average annual premiums were $302 lower, or $155 lower if using a more conservative approach, Reuters reports. Humana's premiums were pegged as $43 less where competing with Aetna.
Aetna spokeswoman Kristine Grow told Reuters there would still be significant Medicare Advantage competition from current health plans and other new entrants--and that those who do see price increases could choose to switch to traditional Medicare. "This keeps downward pressure on prices and upward pressure on quality," Reuters quoted Grow.