'Heavy regulation creates mergers': Matt Welch on Obama's Cigna/Anthem Antitrust Action

'The biggest effect of regulation is what we do not see,' Welch tells Fox Business


Yesterday I appeared on Fox Business Network's The Intelligence Report with Trish Regan, Network to talk about the Obama administration's antitrust objections to the proposed $48 billion merger of health care giants Cigna and Anthem, and how that fits with the overall antitrust and regulatory record of the past seven-plus years. The clip is here:

Reason on antitrust here.

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  1. “Obama Administration’s antitrust objections to the proposed $48 billion merger of health care giants Cigna and Anthem”

    So basically the Feds object to the competition.

  2. I used to work for an insurance company. We had literally buildings full of people who did nothing except state and federal filings and other compliance work.

    The level of effort for that work is driven by the diversity of your products and regulator demands. The size of the company is pretty irrelevant so it makes sense that the regulatory overhead shrinks as a percent of revenue as the company gets bigger.

    1. So regulation creates jobs? /sarc

      1. Sure – jobs that a unified Cigna / Anthem would immediately cut since they add no value.

  3. I love how Matt’s eyes are closed on the final frame of the clip.

  4. I disagree. Obamacare did a lot of crap.

    Mergers and Monopolies were happening way before Obama.

    The little guy has little chance against the big guys. This is one part where I think we need government to stop it before we end up with The Insurance Company, The Bank, The Hardware Store, and The Supermarket.

    Simply eliminating every law concerning Healthcare will not stop the Big Guys that are already in control. And not that I’m a fan of Obamacare.

    1. *blink*

      Did you watch the clip?

    2. Sounds like Bernie’s corporatist utopia. Why do you want children to starve?

      1. You saw how Roose Bolton’s dogs behaved when he starved them? Similar principle.

    3. So you believe that if today healthcare laws disappeared, and tomorrow a well-funded startup company with 100 employees sprung up offering a $40/month catastrophic and preventative only health plan that you could buy online in 10 minutes, that people would rather keep paying three times as much because of Those Darn Big Guys?

      You overestimate The Big Guys. If they were so damn powerful they wouldn’t need to constantly lobby to pass laws primarily affecting smaller guys.

    4. “The Insurance Company, The Bank, The Hardware Store, and The Supermarket” will only exist as long as they serve the desires of consumers. There is no logical reason to ever fear monopoly. Just the pants-shitting terror of ignorance (of which you obviously have a lot.)

      Even Rockefeller found out that the best way to eliminate the competition wasn’t buying them out, it was keeping consumer prices so low no one else could compete. That’s a giant win for consumers, but the anti-trust act fucked it all up just as the problem solved itself.

      1. One of the big complaints against Standard Oil was that they were too efficient at turning raw oil into products other than kerosene or gasoline. They were making products out of the parts of the oil distillate that other companies simply threw out!

        Then there was a railroad baron who was shut down under the Anti-Trust Act for charging customers too little!

    5. It’s unfortunate (and sad) that you, like the vast majority of Americans, do not think about how difficult it is to sustain a monopoly without the “help” (force) of government.

      Try calling Comcast’s cable TV customer care. Ranked the worst company in the US yet still has monopoly in many major cities.

      And let’s assume 1 thing: If there is a monopoly that can give me (the consumer) cheapest and best goods and services for my liking, then why should I stop it? Because other people know what’s best for me?

      Of course many of the government officials are very intelligent people, and they know all this. Their constituents that give them the votes ..? I am not so sure.

    6. Simply eliminating every law concerning Healthcare will not stop the Big Guys that are already in control.

      There is only one “Big Guy” in control, and the manner through which said control is exercised is the force of law.

    7. Big monopolies eventually self-destruct in an open market. The bigger you get the more dead weight you begin to carry. Someones pet project gets started and then never stops because it goes unnoticed by the higher ups who never talk to anyone on that level. Eventually a smaller leaner company with a better (or just less cluttered by time) business model swoops in and starts stealing your customers with lower prices and higher quality products. The big guys are so big they can’t figure out what is useless fat weighing them down and what is necessary to stay on top, so they either make no changes and are taken over or they make the wrong changes and become even less competitive.

      Note this is also a major problem with government. Except governments never have a competing group taking over with a better model sans a bloody revolution.

  5. Obama’s greatest achievement in deregulation: the agreement with Iran. They’ve announced a $50 billion deal with Boeing and Airbus. That seems to cement Obama’s agreement over the next presidency, even a Trump presidency though he said he’d scrap it.

    1. Obama’s greatest achievement

      Talk about damning with faint praise…

      1. Sure, the fainter the better. But it’s Obama’s own achievement, and no one pushed him into it. And it has the potential to substantially change things in an important foreign policy area. It also opens Iran to American businesses and vice versa.

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