U.S., New Hampshire Sue to Block Merger of Health Insurance Suppliers

The United States and New Hampshire have filed a civil antitrust action in the District of New Hampshire to halt the proposed merger of two commercial health insurance sellers, Harvard Pilgrim Health Care, Inc. and Health Plan Holdings, Inc. Monday’s filing alleges that consolidation will likely harm New Hampshire commercial group health insurance purchasers by raising prices, decreasing quality, and reducing healthcare choices.

According to the filing, Harvard Pilgrim has over one million members who subscribe to its commercial group health insurance. Its customers are reportedly small and large employer groups in New Hampshire, Massachusetts, Connecticut, and Maine.

The filing states that Health Plan Holdings also sells commercial group health insurance to small and large employer groups in New Hampshire through a recently acquired and solely owned subsidiary, Tufts Health Freedom Plan, Inc. (Tufts Freedom). The defendants reportedly agreed to merge on Aug. 9, 2019.

According to the complaint, Harvard Pilgrim and Tufts Freedom are two of the three top companies offering commercial group health insurance plans to certain small and large group employers. Reportedly, the competition between the two has lowered premiums, enhanced plan benefits, and bettered service for New Hampshire purchasers.

The plaintiffs claim that the proposed combination would eliminate this “head-to-head” competition to the detriment of plan purchasers. Specifically, the plaintiffs assert that because the relevant markets consist of just a few sellers, the transaction would significantly increase their concentrations. The resulting consolidation, the plaintiffs averred, is presumptively unlawful. In turn, they ask the court to permanently enjoin the proposed merger and adjudge it in violation of the Clayton Act.