SANTA MONICA, Calif., June 23, 2016 /PRNewswire-USNewswire/ -- The U.S. Department of Justice should heed today's recommendation by California Insurance Commissioner Dave Jones and reject the proposed $37 billion merger of health insurance giants Aetna and Humana, said Consumer Watchdog. Consumer Watchdog said approving the merger would mean higher costs, reduced benefits and fewer choices for health insurance consumers across the nation.
In just an eight-month period between 2014 and 2015, Aetna subjected California policyholders to $39 million in excessive rate hikes, and has imposed at least 11 rate hikes that regulators found to be unreasonable since 2012. A continuation of this pattern of unreasonable premium rate hikes will make an Aetna - Humana merger even more costly for consumers, said Consumer Watchdog.
"Aetna has overcharged policyholders millions, just in the last few years. Yet Aetna and Humana won't commit that future rates would be justified, or to pass on any of the supposed $1.25 billion in merger savings to consumers. There is no upside for consumers from this deal. We urge the Attorney General to reject this merger that will mean higher prices, reduced benefits and fewer choices for consumers," said Carmen Balber, executive director for Consumer Watchdog.
Company executives have justified the merger to regulators and shareholders with promises of $1.25 billion in cost savings, yet the company refused to commit to the Department of Insurance that any of those savings would go to consumers.
Aetna's merger history justifies concerns that consumers will see higher costs and reduced benefits if the merger is approved. After the 1998 merger of Aetna and Prudential, insurance rates increased 7%, and health insurance costs to consumers increased by $34 billion.
California Senator Dianne Feinstein joined a group of U.S. Senators to urge the Department of Justice to reject the Aetna-Cigna deal in a letter sent to DOJ this week.
Read the Department of Insurance letter: http://www.consumerwatchdog.org/resources/jonesltrremergeraetnahumana06-23-16.pdf
Read Consumer Watchdog's letter: http://www.consumerwatchdog.org/resources/aetna_humana_merger_letter_0.pdf
Read the U.S. Senators' letter: http://www.consumerwatchdog.org/resources/senatorsaetna.pdf
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ca-insurance-commissioner-rejects-aetna-humana-merger-consumer-watchdog-urges-us-dept-of-justice-to-follow-suit-deny-merger-with-no-upside-for-consumers-300289580.html
SOURCE Consumer Watchdog