A Novel Look at Antitrust Analysis in Health Insurance Markets

Abstract

By their nature, the recent antitrust cases scrutinizing the two proposed health insurance mega-mergers -- Anthem with Cigna and Aetna with Humana -- focused on narrow definitions of specific markets and the likely static impact on prices. But the antitrust proceedings omitted a broader discussion of the forces acting on the health care market that brought these proposals forward. In this paper, we examine the structure of health care markets, scrutinize some specific questions about the antitrust analyses in these cases, explore alternative theories of antitrust regulation, and conclude with a new antitrust model to consider market dynamism in health insurance markets.

Keywords: health insurance mergers, architectural innovation, antitrust policy

JEL Classification: I13, L40, O38