The DOJ filed the lawsuits on Thursday, alleging the mergers would badly hurt competition in the industry. In a mid-morning press conference, U.S. Attorney General Loretta Lynch said if the deals were to proceed, American consumers would suffer.
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In a move that isn’t entirely a surprise, New Hampshire has joined 11 states and the federal government in a lawsuit opposing the $48 billion merger of health insurance giants Anthem and Cigna, saying it would harm competition.
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.
Jepsen declined to join the suit against the Aetna-Humana merger, though, saying Humana doesn’t sell it’s Medicare Advantage plans or traditional health insurance plans in CT. Principal Deputy Attorney General Bill Baer said that Humana and the other insurers are continuing to profit and the merger would only sweeten the deal for them.
The Justice Department also sued to block Aetna Inc.’s proposed acquisition of Humana Inc., citing concerns that the two megamergers would drastically constrict competition in key markets, drive up premiums and reduce quality. Aetna would owe Humana $1 billion should its takeover fail under a US challenge.
“A combined company is in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage plans”, the insurers said.
For the past several years, the administration has leaned heavily on insurers to help implement the 2010 health law, often called Obamacare. “This competition benefits Americans who can least afford health insurance”, the complaint states.
Anthem’s acquisition of Cigna, which was proposed past year, would be the largest health insurance industry merger in history.
The mega mergers would significantly reduce the number of health insurers across the country.
In the litigation, the Justice Department described Anthem as having a reputation for having “poor customer service” and “being hard to work with”, while it said Cigna has “highly regarded customer services” and that it “works closely with doctors and hospitals”. Cigna released a separate statement to confirm that it is “currently evaluating its options consistent with its obligations under the agreement”.
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Analysts who follow the industry say that when insurers grow big nationally it doesn’t necessarily mean they dominate the local markets where their products are sold because there are so many regional insurers.
