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Doctors argue Anthem, Cigna merger would violate antitrust law

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The American Medical Association has urged California regulators to block health insurer Anthem Inc.'s proposed acquisition of rival Cigna Corp. on grounds that the deal would eliminate competition and threaten the state's health care system.

The AMA testified Tuesday before the California Department of Insurance that the Anthem-Cigna merger would violate federal antitrust guidelines for highly populated metropolitan areas across California, the Chicago-based physician group said in a statement.

Consolidation among health insurers increases their ability to “exert control over clinical decisions, which undermines the patient-physician relationship and eliminates crucial safeguards of patient care,” the AMA said in the statement

However, preserving competition can lower premiums, enhance customer service and improve quality while lowering health costs, according to the AMA.

Anthem already has the largest geographic footprint of any private health insurer in California's metropolitan areas with market share advantage of 57%, the physician group said.

Anthem has the largest market share in 16 of 28 metropolitan areas in California, and it is the second-largest health insurer in the remaining 12 markets, according to the AMA.

Allowing Anthem to merge with Cigna would prevent new insurers from entering the market, the AMA argued.

“California should act to block the harmful merger and foster a more competitive market place that will operate in patients' best interests,” Henry Allen, the AMA's top antitrust attorney, said in the statement. “The state's fragile health care system should not be left vulnerable to a giant health insurance company with anticompetitive market power. The consequences of the proposed merger would have negative long-term consequences for health care access, quality and affordability in California.”

Anthem did not immediately respond to requests for comment.