Insurers tell skeptical Senators mega-mergers will help

Massive insurance company mergers will help the healthcare industry move toward value-based pay, CEOs of two insurance companies on the brink of acquisition deals testified during a Senate Judiciary Committee hearing on Tuesday.

Aetna CEO Mark Bertolini and Anthem CEO Joseph Swedish told Senators that mergers involving four of the country's five largest insurance companies would create more insurance resources for consumers, help keep benefits more affordable and promote better quality care. Swedish also noted that the mergers could “empower better informed decision-making between patients and physicians.”

Senators and other critics, including American Hospital Association President and CEO Rick Pollack, raised concerns that merging the companies might make healthcare more expensive for consumers in the commercial market. Pollack said he fears “negative consequences” stemming from the companies' market domination, which could potentially cover 131 million people — 40% of those with health insurance.

“The merger led to reduced payments to providers, but the cost savings weren't passed through [to policyholders],” Leemore Dafny, a health economist at Northwestern University, said during the hearing. “We are paying a premium on our premiums because of limited competition.”

Aetna is currently in the process of buying Humana in a $37 billion deal; Anthem is acquiring Cigna Corp. for $54.2 billion. Both transactions need government approval before they're finalized.