ICLE White Paper

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


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.