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Bill To Give California More Oversight Over Health Plan Mergers Clears State Assembly

A federal judge has ruled against Aetna's proposed merger with its rival, Hum...

Photo by Jessica Hill AP

Above: A federal judge has ruled against Aetna's proposed merger with its rival, Humana.

A federal judge in 2017 rejected a proposed merger between health insurance giants Aetna and Humana, saying it would likely lessen competition.

The California Assembly has passed a bill that would give state regulators the authority to reject such mergers on similar grounds.

The measure, AB 595 (Wood) would essentially give the Department of Managed Health Care more oversight over proposed health care mergers. Under the bill, the department could make its approval contingent on a number of factors, including whether the proposed merger would improve health care quality and reduce health disparities.

Insurance companies say the bill is too broad, and that its approval standards are unreasonably high.

Anthony Wright, executive director of the nonprofit Health Access California, one of the bill's sponsors, said health plan mergers should be scrutinized.

“We don’t believe that bigger is always better, that there are reasons why some of these mergers can be not in the interest of patients or the public, and that is why we need to have this type of review,” Wright said.

The measure is now under consideration in the state Senate.

The California Assembly has approved a measure that would give state regulators the power to reject proposed health plan mergers.

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