Focus Areas:    Antitrust | DOJ Antitrust Division | Health Care & Insurance | Mergers

When Past Is Not Prologue: The Weakness of the Economic Evidence against Health Insurance Mergers

ICLE Antitrust & Consumer Protection Research Program White Paper 2016-4 (Dec. 8, 2016) View Original


This white paper counsels extreme caution in the use of past statistical studies of the purported effects of health insurance company mergers to infer that today’s proposed mergers — between Aetna/Humana and Anthem/Cigna — will likely have similar effects. Focusing on one influential study — Paying a Premium on Your Premium (“Paying a Premium”) by Dafny, Duggan & Ramanarayanan (“Dafny, et al.”) — as a jumping off point, we highlight some of the many reasons that past is not prologue.

In short: extrapolated, long-term, cumulative, average effects drawn from 17-year old data may grab headlines, but they really don’t tell us much of anything about the likely effects of a particular merger today, or about the effects of increased concentration in any particular product or geographic market.

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