Ohio Lt. Gov. Mary Taylor has been asked by a coalition of consumer groups and unions concerned with two proposed mergers in the health insurance industry to hold hearings on the matter. Taylor, who serves as the head of the Ohio Department of Insurance and could call for hearings, has refused.
In a letter to her on the mergers, those groups—Consumers Union, UHCAN Ohio, U.S. PIRG, CFA, Consumer Watchdog, DC37 and Consumer Action—said they have long been concerned “with the competitive landscape within the health care industry.”
Gov. John Kasich’s Lt. Governor Mary Taylor, a former state auditor, has shown her dislike for the Affordable Care Act [ACA]. Both she and Gov. Kasich have done as much as they could to not cooperate with the ACA.
Ohio’s leadership duo decided not to set up a state-run healthcare exchange after the U.S. Supreme Court ruled it constitutional, claiming at the time it was too expensive. Ohioans who shopped for affordable coverage did so on an Ohio exchange set up and run by the Federal Department of Health and Human Services.
Rob Nichols, Gov. Kasich’s Press Secretary, said in November of 2012 that Ohio would have no flexibility to shape an exchange to its needs, and that the costs associated with doing so would be so high that it doesn’t make fiscal sense for the state to operate a health exchange under Obamacare.
“We’re going to leave that to the federal government,” Nichols said at the time. “Instead, Ohio will focus on continuing to make our health insurance market as stable and competitive as possible and make our Medicaid program as well-run as possible, which is why we’re opting to retain maximum state control in those areas instead of beginning to turn over parts of them to the federal government.”
The Kasich Administration calculated that a state-run exchange would cost about $43 million annually, versus about $1.6 million to participate in the federal exchange.
Mrs. Taylor has long complained that the ACA forced healthcare providers to raise their rates, while not acknowledging that federal subsidies to those who qualified reduced those rising premiums to more affordable levels, a fundamental design of the nation’s evolving healthcare law Gov. Kasich has vowed to eliminate should be find himself in the White House next year.
That concern, the coalition explained, is about “competition within different health care markets that offers ample choice, high quality, and transparency is vital to ensuring accessible and affordable care to employers and consumers.” They argue that competition between health insurers is essential to “ensuring lower premiums, improving quality of care, and promoting access and choice.”
At issue are the proposed mergers between dominant industry insurers Anthem-Cigna and Aetna-Humana. “We write to ask that the Ohio Department of Insurance utilize all of its powers, including conducting public hearings, to thoroughly evaluate the impact of these possible mergers under Ohio law.” As the director of the state insurance agency, Lt. Gov. Taylor is empowered to review health insurance mergers and acquisitions within the state. Hearings would inform Ohio consumers about the effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly, a media release said.
In previous reports, an anti-trust attorney working with some of the groups who signed onto the letter said he expects this merger to play out like previous one. “Past mergers have led to significant premium increases and less consumer choice,” said David Balto, the anti-trust attorney.
If the merger proceeds, the letter sent to Director Taylor says the new company could control about 60 percent of the portion of the Ohio market that’s predominantly made up of large employers that pay for their own workers’ health care costs and purchase administrative services through an insurer.
A further concern is that choices for Medicare Advantage in some Ohio counties would be worse than now.
Meanwhile, the Department of Justice is currently reviewing the proposed mergers for anti-trust purposes. The Ohio Department of Insurance is not required to but is allowed to hold hearings on the mergers, the groups note. “ODI as the regulator has a formal role in this process,” the letter says.
ODI under Mary Taylor, who is widely expected to run for governor once Kasich leaves office in 2018, is saying publicly it will not be holding public hearings.
Erin Trish, a researcher at the University of Southern California’s Schaeffer Center for Health Policy and Economics, said that what usually happens when there’s less competition is that consumers seldom benefit, according to reports.
“When insurers merge, there’s almost always an increase in premiums,” Trish said, noting that company shareholders, not consumers, will benefit the most. On the bright, Trish said “consolidation among insurers could mean a stronger position in negotiating lower rates with hospitals.”
When the ACA became operational, Gov. Kasich and Lt. Gov. Taylor saidy they want every Ohioan to have health care coverage and believe the route to achieving that is a market-based system that encourages both high quality and low costs.
“A rigid, prescriptive health insurance exchange that reduces choices and drives up costs does not align with the Kasich Administration’s health policy goals,” they said. “Turning down a state-based health exchange and saying no to federal regulation of Ohio’s health insurance industry and Medicaid eligibility determination is the best approach for Ohio, and Ohio will inform the federal government of its plan for preserving these rights early next year.”