The Department of Justice said that the combinations of Aetna and Humana and Anthem and Cigna would hurt competition that restrains the price of coverage and reduce benefits, among other drawbacks. They argued that combining would indeed benefit consumers and Medicare Advantage customers.
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WASHINGTON, D.C. Federal regulators are suing to stop two major health insurance mergers because they say the deals will increase health care costs for Americans and lower the quality of care they get.
The Justice Department suit says a merger between Aetna and Humana would also harm Missourians who buy health insurance on the exchanges, or HealthCare.gov, because Aetna and Humana are “two of the most significant” insurers on exchanges in Florida, Georgia and Missouri.
“These four are already some of the largest, most sophisticated companies in the country”.
Aetna had proposed divesting some of its Medicare Advantage plans to address potential antitrust issues, but the Justice Department said that remedy was inadequate.
“Regardless of what’s decided about the merger, there needs to be a decision taken about whether or not the commissioner had a conflict of interest and whether or not she was being open and forthcoming with the information (the Citizens Ethics Advisory Board) required to actually issue an opinion”, she said.
“Allowing commercial health insurers to become too big and exert control over the delivery of healthcare would be bad for patients and the vitality of the nation’s healthcare system”, said AMA President Andrew Gurman.
While Anthem said it is “fully committed to challenging the DOJ’s decision in court”, it also said it would “remain receptive to any efforts to reach a settlement” with the Justice Department to allow the deal to be completed.
The legal actions are unlikely to end the maneuvering in the health insurance industry, and Aetna and Humana said in a joint statement Thursday that they plan to “vigorously defend” their deal. Anthem, the Blue Cross-Blue Shield insurer involved in one of the proposed mergers, called it “an unfortunate and misguided” step backward for access to affordable care. “In light of the DOJ’s decision, we do not believe the transaction will close in 2016 and the earliest it could close is 2017, if at all”. Both of the pending mergers would reduce the number of major national health insurers from five to three. “There are too many unanswered questions and too much at stake in reducing competition for Tennessee to support this merger”, Attorney General Slatery said.
Joining the U.S.in the Cigna/Anthem suit are nine states and the District of Columbia, including California and CT who both had storied histories with the pending merger.
Despite the fact that Missouri is frequently cited in both suits as a state that would face substantial harm from these mergers, Missouri is not listed as a plaintiff in either suit.
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Missouri Attorney General Chris Koster’s office said the state’s regulations regarding mergers are more “protective” of consumers.
