The Trump Effect on Mega-Mergers

In the latest issue of Verden ViewPoint we discussed the likely impact of proposed health insurance company mega mergers. It remains to be seen how the election of Donald Trump could affect the deals between Anthem & Cigna, and Aetna & Humana but it’s entirely possible that a Trump administration would be pro merger.

With the Anthem/Cigna deal already before the courts and the Aetna/Humana trial scheduled for December, it’s fairly safe to assume that decisions in both cases will be made before Trump is set to take office in January but that likely won’t be the end of it.

Conservative Republican Senator Jeff Sessions was recently nominated by Trump to be Attorney General, and while we can’t know how Sessions would deal with antitrust cases, we do know that Trump has said he wants less government regulation of business.

It’s not clear how Mr. Sessions would have the department handle antitrust cases, but Mr. Trump has previously said that he wants “deep cuts” to government regulation of business. It’s doubtful that the DOJ would drop the cases but it’s also entirely possible that the losing party will appeal and that’s where Trump’s influence may come into play. Where a Trump administration will stand on antitrust issues can’t really be known until key positions in Federal Trade Commission and Justice Department are made but it’s not far fetched to think a Trump administration will be more lenient in terms of a settlement favoring a big insurer.




Humana gets political

Federal lawmakers recently urged CMS to investigate a letter sent by Humana Inc. to its Medicare Advantage members. Humana’s undated letter states: “Leading health reform proposals being considered in Washington, D.C., this summer include billions in Medicare Advantage funding cuts, as well as spending reductions to original Medicare and Medicaid. While these programs need to be made more efficient, if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.” The one-page letter is signed by Humana Medicare’s chief medical officer, Philip Painter, M.D.

Scare tactics? I’ll say!

CMS has demanded the company “immediately” stop member mailings warning that reform legislation could hurt them, and to remove any related materials from its Web site.

But CMS did not stop at Humana. It has issued the warning to cover the entire MA industry effective Sept. 21. The agency issued new guidance to MA and Part D plans to “suspend potentially misleading mailings to beneficiaries about health care and insurance reform.” AHIP has responded that seniors “have a right to know how the current reform proposals will affect the coverage they currently like and rely on.” It’s just a pity Humana decided to frame the communication to scare seniors rather than enlighten them.

But the real kicker is that Humana’s letter urged its enrollees to contact their members of Congress to protest healthcare reform. Isn’t it bad enough insurers are spending roughly $1.4 million a day on lobbying efforts in Washington to kill reform without also lobbying its members directly using shoddy ‘facts’? Where do we draw the line and say enough is enough? The numbers don’t lie. Let’s stick with the facts. Insurers are making huge profits at a time when many Americans cannot afford the product they sell. In not other industry would such mis-economics continue to survive, let alone thrive.

Luckily, CMS marketing rules require that member communications to meet certain requirements and the use and disclosure of protected health information to contact members to get them to lobby for or against certain reform legislation appears to be something that HIPAA rules do not allow. At the least, Humana will be facing fines and perhaps suspension from MA activities for a while.

However, that does not compensate for the misinformation. Unless Humana is required to send a notification to those same members informing them of its wrong-doing, it has accomplished its goal and moved real reform further out of reach.  How big a blow has a simple letter like this dealt to progression? As of the end of the second quarter, Humana had 1.5 million MA enrollees, all of whom may have recieved this letter. . .