HMO mergers and medicare: the antitrust issues

This paper presents a theoretical framework to predict the effects that may arise from mergers in the rapidly-growing Medicare HMO market. We argue that mergers of large Medicare HMOs should be targeted for antitrust investigation because there are significant barriers into this market. The recent merger of PacifiCare and FHP is used to illustrate the potential antitrust issues raised by Medicare HMO mergers. © 1998 John Wiley & Sons, Ltd.