U.S. doctors group says planned health mergers are anti-competitive

NEW YORK (Reuters) - The leading U.S. physicians' organization said on Tuesday that two proposed mergers of U.S. health insurers worth tens of billions of dollars could lead to higher prices in 17 states for companies that buy insurance for their workers or people who buy their own insurance. Aetna Inc announced plans to buy smaller rival Humana Inc in early July and Anthem Inc agreed to buy Cigna Corp later that month. Both mergers are being reviewed by the U.S. Department of Justice and state insurance officials. The American Medical Association study focused on the impact on the commercial fully insured and self insured markets, largely made up of employer-based plans. The health insurers also manage plans for Medicare, Medicaid and other government programs not included in the study. The proposed insurance mergers follow the implementation of President Barack Obama's healthcare overhaul, the Affordable Care Act, which extended health insurance to millions of people. Insurers say the combinations will help them better compete as companies as the government tries to rein in healthcare spending. Anthem and Cigna combined would affect competition in 13 states where they sell individual insurance plans and in all 14 states where Anthem currently operates Blue Cross Blue Shield plans, the AMA's analysis found. Anthem spokeswoman Kristin Binns said the two companies have limited overlap and the merger would help consumers by allowing the merged company to better manage costs. An Aetna and Humana merger would raise anti-competitive issues in as many as 14 states overall including Humana's home state of Kentucky, Texas, Georgia, Utah and Florida, the study said. The majority of Humana's business is in Medicare Advantage, which is not part of the study. An Aetna spokeswoman noted that Humana's focus is on Medicare. "The AMA report focuses on competition in the commercial marketplace, which would not meaningfully change following an Aetna/Humana combination given Humana’s very small commercial business," spokeswoman Cynthia Michener said. The American Hospital Association has also made public its analysis of the two deals, saying they would diminish competition. The Department of Justice will take a hard look at the study, said Mark Ryan, of the law firm Mayer Brown and formerly of the department's Antitrust Division. "I think they'll pay a lot of attention to what the doctors are saying because they would be impacted by the merger," Ryan said. Doctors could well be concerned that they would be paid less because of the mergers, said Andrew Gavil, who teaches antitrust at Howard University School of Law. "The AMA could be right but obviously they are self-interested," Gavil said. (Reporting by Caroline Humer in New York and Diane Bartz in Washington; editing by Frances Kerry and Grant McCool)