Offtopic - Antitrust and Obamacare

[Nashville]

Certainly not directly related to taxes, but many of us continue to be amazed at how our government in no way wishes to live with the misery it places on its subjects.

The readers may differ on whether the Antitrust division of the DOJ is protecting the public against monopolistic practices and non-competition in the marketplace. Speaking for myself, I think they have become a rubber-stamp for corporate America when compared to the job they were doing several decades ago.

Currently, two sets of large health insurance companies are wishing to merge. There are only five nationwide players, Aetna, Humana, Cigna, Anthem, and the AARP-sponsored United Healthcare. Aetna/Humana wish to merge, as well as Anthem/Cigna. If these were cable companies, phone companies, energy companies, etc. etc. the Antitrust people would rubber-stamp this and announce that "sufficient competition exists" for the public to be well-served.

But not this time. The DOJ is rushing in to block these mergers because Obamacare is involved. These are the companies that we are told were going to "result in cheaper insurance by competing with each other." And the other company, United Healthcare, has announced they are dropping out of the national exchange because they are not making any money. I'm sure the govt will try to coax them back into participating.

Not a chance these companies will be allowed to merge under current conditions. The government takes care of themselves whether they take care of us or not.

[Rapid Robert]

Certainly not directly related to taxes, but many of us continue to be amazed at how our government in no way wishes to live with the misery it places on its subjects.

The readers may differ on whether the Antitrust division of the DOJ is protecting the public against monopolistic practices and non-competition in the marketplace. Speaking for myself, I think they have become a rubber-stamp for corporate America when compared to the job they were doing several decades ago.[...]

But not this time. The DOJ is rushing in to block these mergers because Obamacare is involved.

Your conclusion that only health-related mergers are being investigated is faulty. Recently we've seen mergers blocked including Office Depot/Staples, Halliburton and Baker Hughes, Comcast/Time Warner, Electrolux/GE appliances. In fact the current administration is more aggressive than prior, but less so than the one before that. However it is also a matter of what mergers are attempted in the first place, which changes over time with the economy and tax laws.

Aslo, as for protecting "consumers", I thought the vast majority of Americans get health insurance not through Obamacare exchanges, but either through employer group plans, or Medicare. Part of the problem has always been that individuals really aren't "consumers" of health care/insurance and have little idea of the actual cost of anything (it wasn't until Obamacare, after all, that we even got Box 12 Code DD on the W-2).

Note this link may require a few clicks to get through to the article, it was found by searching "blocked corporate mergers" at Google.

http://www.ft.com/cms/s/0/7608d102-177c-11e6-b197-a4af20d5575e.html#ixzz4H2YpByvi

"In the first six years of the Obama administration, the DoJ, which together with the FTC are the main competition watchdogs, publicly challenged on average 17 deals a year from 2009 to 2014, the last year for which data are available.

In comparison, the Republican administration of George W Bush challenged an average of 14 deals a year, while Clinton challenged 32 a year, according to the DoJ."

[Snaggletooth]

Antitrust

Robert - interesting to hear another opinion. You may be correct but I'm wondering if most people believe the antitrust division is working to really help John Q Citizen.

Interesting is the rejection of Staples and Office Depot. Sounds good, but remember they had already allowed the merger of Office Depot and Office Max, leaving only Staples as the sole remaining national store competitor. "Quill" also exists, but I don't believe they are brick and mortar.

One of the most famous break-ups occurred in 1911 with the breakup of Standard Oil. However, at the time, the two largest factions were Std of New Jersey (today Exxon) and Std of New York (Mobil). These two largest factions have been allowed to re-merge. In all fairness, the consumer has not felt the effect, because even with a dozen factions, they were all in collusion to set the price based on oil futures.

Another function is not just to limit the mergers but also to assure that the existing competitors do not meet in the back room to fix prices and policies, meaning the choices available to the consumer are many, but are reduced to none. Many of these companies obviously "fix" prices, but then whine "foul" if they are confronted with collective bargaining.

The business community at large pledges undying allegiance to "free market capitalism" but the sad fact is they really do not want a "free market". The largest players do their dead-level-best to stomp out competition, and encourage government regulations to squash smaller companies.

I'll shut up as this is not really a tax topic. Interesting economic discussion but probably better reserved for some other type of forum.

[Maude Lebowski]

Quill is owned by Staples

Nothing to add, except that Quill is owned by Staples and it is mail order only, as far as I know.

[Snaggletooth]

The saga continues

I did state I wouldn't revisit this because it is not a tax topic, however recent news events stir this pot some more.

Aetna is dropping all but 4 states from Obamacare exchanges. The official reason is the coverage did not have enough young applicants to offset the old and sick. It has been suggested, however, that between the lines is a counterattack against the justice department for interfering with their proposed merger with Humana.

Further opinions are that the intent of Obamacare from the beginning was to run the insurance industry out of business and for government to come in and "save the day" by offering a single-payer solution.