Tennessee is joining in on U. S. Dept. of Justice litigation to block the merger of health insurance companies Anthem and Cigna, state Attorney General Herbert H. Slatery III announced today.
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Two giant mergers among the nation’s five largest health insurers, including Indianapolis-based Anthem, were put on hold Thursday by the U.S. Justice Department.
The government suit focused particularly on their offering of Medicare Advantage, privately managed delivery of the government’s Medicare health benefits programs for people over 65.
If the health insurers decide to fight the lawsuits, Bloomberg reports that it would likely take months to resolve.
Aetna and Humana responded Thursday by pledging to “vigorously” defend their merger plans.
WASHINGTON-The Department of Justice is suing four major health insurance companies in an attempt to block two proposed mergers.
Aetna and Humana promised a “vigorous” defense of their pending union, but it means at least delay – and at most overhauls or death – for deals that would reshape the health insurance industry nationwide and in Florida.
“The impacted insurers should refocus on competing with better prices and services, rather than resisting anti-trust officials and seeking to buy their competitors.” said Wright.
Shares of all four health insurers jumped Thursday after the Justice Department announced the lawsuit. Cigna provides health insurance to 15 million people.
State law says Insurance Commissioner Roger Sevigny must approve such mergers following an examination of company finances and the proposal’s effect on the competitive marketplace.
She also said the mergers would come at the expense of members and doctors. According to the Kaiser Family Foundation, if Aetna acquired Humana with no divestitures in 2016, the combined firm would cover 25 percent of Medicare Advantage customers.
Cigna said it was “evaluating its options” in response to the suit.
Anthem called the DOJ move “unfortunate and misguided step backwards for access to affordable healthcare for America”.
It’s an odd move for Bondi to join forces with the federal government. Anthem proposed to acquire Bloomfield-based Cigna for $54 billion and Hartford-based Aetna sought Humana Inc. for $37 billion. Harris and 11 other states joined in the suits.
An Anthem spokesman could not be immediately reached for comment.
There are now five national health insurers, and the deals would reduce that number to three.
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Antitrust regulators had been expected to file lawsuits aimed at blocking both deals by the end of next week, Reuters reported earlier this week. The American economy relies on competitiveness in business to keep prices at a reasonable level, and the proposed mergers will not allow that to happen.
