Center for American Progress

Healthcare mega-mergers drive income inequality. They must stop
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Healthcare mega-mergers drive income inequality. They must stop

Topher Spiro discusses why the U.S. Department of Justice's most recent action comes at a critical moment for the health care system and antitrust policy.

On July 21, the Department of Justice filed suit to block two mega health insurance mergers: Aetna’s purchase of Humana and Anthem’s purchase of Cigna. These mergers would have consolidated the five national insurers to only three, shaking up the healthcare landscape. At this critical moment for the healthcare system and antitrust policy, regulators made the right call – and their skepticism should apply to all healthcare mergers.

A large body of research finds that consolidation of insurers tends to increase premiums, while competition tends to lower premiums. For instance, in areas where Aetna currently competes with Humana, Aetna’s premiums are up to $300 lower than in areas where the two companies do not compete. Their merger would not only eliminate this current competition, but also foreclose any future competition between them in other areas and markets.

The above excerpt was originally published in The Guardian. Click here to view the full article.

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Topher Spiro

Vice President, Health Policy; Senior Fellow