WASHINGTON — With high stakes in play, Aetna has hired four high-powered Washington lobbying firms to help the health insurer win federal approval of a merger with Humana. Cigna followed by hiring three D.C. lobbying firms to press its case to merge with Anthem.
To help counter criticisms of its proposed merger, Aetna on Aug. 14 hired Bloom Strategic Counsel, CGCN Group, The Gibson Group and West Front Strategies. They will join two other lobbying firms Aetna already had working on its behalf, Capitol Hill Consulting Group and Sidley Austin.
Meanwhile, Cigna last week hired Polaris Government Relations, Heather Podesta + Partners and Wilmer Cutler Pickering Hale and Dorr, giving the company representation with ties to both Democratic and Republican lawmakers.
Humana and Anthem have not hired any new representation in the nation’s capital. But they both have long-term relations with Washington lobbyists.
Seth Bloom, a former general counsel to the Senate Judiciary Committee, a panel that has planned hearings on the mergers in September, is among Aetna’s new stable of lobbyists. So is Joseph Gibson, a former attorney with the House Judiciary Committee, which also plans to scrutinize the proposed mergers in a series of hearings beginning next month.
Both Bloom and Gibson have close ties to GOP lawmakers.
Meanwhile, one of Cigna’s new lobbyists is Heather Podesta, a major fundraiser for the Democratic Party.
The insurers’ moves to supersize their lobbying presence in Washington comes after the American Hospital Association and the American Medical Association, two groups with political clout, launched a campaign to try to press the Justice Department’s antitrust division and the Federal Trade Commission to carefully scrutinize the mergers for possible antitrust problems.
Neither Aetna nor Cigna responded to requests for comments on their new lobbying hires
Aetna and Cigna are headquartered in Connecticut. Anthem also has a presence in the state.
Aetna struck a deal to buy Humana for $37 billion, which would cover 33 million members. Anthem, a Blue Cross and Blue Shield insurer, wants to buy all of Cigna’s shares in a cash and stock transaction that would cost $54 billion and cover 53 million members.
The future of both deals is now in the hands of federal regulators, who face a complex review process given the size of the insurers and the markets they serve.
With billions of dollars at stake, the proposed mergers have launched a classic lobbying war in Washington.
The nation’s doctors and hospitals say the mergers could result in a dangerous consolidation in the health insurance world that would hurt both patients and health care providers.
“To give commercial health insurers virtually unlimited power to exert control over an issue as significant and sensitive as patient health care is bad for patients and not good for the nation’s health care system,” said AMA President Steven Stack in a statement. “The U.S. Department of Justice has recognized that patient interests can be harmed when a big insurer has a stranglehold on a local market.”
Merging with Humana would give Aetna more than one-quarter of the total Medicare Advantage market, analysts say. The companies hope to complete their merger at the end of next year.
The insurers say the mergers will give them more bargaining power with hospitals, doctor groups and pharmaceutical companies, and the savings would be passed on to their policyholders.
Anthem spokeswoman Sarah Yeager said the insurers are meeting with hospitals and other stakeholders to try to allay concerns.
“Our commitment to ensuring consumers have access to affordable health coverage and quality care is the foundation of the proposed transaction and will remain Anthem’s top priority along with our commitment to provider collaboration,” Yeager said.
Aetna spokeswoman Cynthia Michener also said her company’s proposed mergers would result in improved medical services.
“Both Aetna and Humana are focused on developing new technologies that strengthen the partnership between consumers and their providers, which will help us move toward a more value-based health care system,” she said. “Together we will have a more comprehensive spectrum of provider solutions, including a robust offering of member-centered provider services, clinical intelligence and data integration and analytics solutions.”
The mergers are being considered in tandem, the Justice Department says. On Aug. 19, Aetna and the Justice Department agreed to extend the review process for 30 days — a process that is likely to repeat itself. Review of the Anthem-Cigna deal is also expected to be extended.
Aetna and Humana shareholders will be able to vote on the merger at separate meetings Oct. 19 in Connecticut and New York.
If both mergers go through, the list of the top-seven health insurers in the nation would shrink to five.
The American Hospital Association says that “could substantially reduce competition and substantially diminish the insurers’ willingness to be innovative partners with providers and consumers in transforming care.”
Because the proposed mergers are so complex, the AHA decided to detail its concerns with each in separate letters to William Baer, the head of the Justice Department’s Antitrust Division — starting with Anthem and Cigna. That letter says that in order to pass antitrust scrutiny, Anthem and Cigna may need to explore divestitures in markets that serve 45 million customers throughout 817 geographic areas.
The letter also says about 55 percent of those covered live in markets where there is no “viable divestiture candidate” for those assets.
Republicans in Congress are blaming the wave of mergers in the health field, which also includes hospital and pharmaceutical mergers, on the Affordable Care Act.
“The sale is the inevitable result of Obamacare’s push toward consolidation as doctors, hospitals and insurers merge in response to an ever-growing government,” Senate Majority Leader Mitch McConnell said in a recent op-ed article. “And the resulting consolidation means less competition among insurers, which could leave consumers with even fewer choices and lower-quality care.”
To McConnell and other congressional Republicans who have called for hearings on the mergers, the Affordable Care Act has made it more expensive to do business in the health care market and spawned an avalanche of new requirements for insurers to deal with.
“Merging into bigger firms, which are better able to absorb the costs of Obamacare and comply with the maze of regulations, has become the answer,” McConnell said.
The Obama administration says the Affordable Care Act has helped slow the growth in health care costs and improved the quality of medicine in the United States.
Debate over the mergers is expected to escalate in September when the AMA releases its latest study of competitiveness in the health insurance industry.
Last year’s report said Anthem is the dominant insurer in the country with dominance in 82 of 388 metropolitan areas examined.
The proposed Aetna-Humana deal will also be considered by the Connecticut Insurance Department and the Wisconsin Office of the Commissioner of Insurance. The Connecticut Insurance Department is also considering the Anthem-Cigna merger.
Although Connecticut Insurance Commissioner Katharine Wade is a former Cigna in-house lobbyist, and her husband currently works for the insurer, she has not recused herself from the reviews.
“It has been nearly two years since I was an employee at Cigna, and I have no financial interest in the company,” Wade said in a statement. “I am prepared to recuse myself from any matter involving Cigna with which I had an active involvement. This merger is not a matter in which I was involved in any way.”
Ana Radelat is a reporter for The Connecticut Mirror (www.ctmirror.org). Copyright 2015 (c) The Connecticut Mirror.
