U.S. Attorney General Loretta Lynch announced the lawsuits, which aim to block deals between Aetna and Humana and Anthem and Cigna.
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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. Earlier this month, when news broke that the DOJ was seriously questioning the merger, Humana’s stock plummeted.
For Matt Cantor, a partner and attorney at Constantine Cannon, the Aetna-Humana deal has a better chance of surviving litigation than Anthem and Cigna’s. It is understood that a final decision on whether or not to go through with the lawsuits could come this week or next week, but regardless of when it happens, the companies will move to settle the lawsuits probably before they are filed.
Georgia’s insurance officials said Thursday they would wait to reschedule the Aetna hearing until the Justice Department inquiry is resolved.
And though Anthem executives testified in March at hearings before the California Department of Insurance that as much as $2 billion in efficiencies could result from the mergers, Insurance Commissioner Dave Jones has said that the savings are “vague, speculative and impossible to verify” upon closer examination.
Lynch said the DOJ’s actions are aimed at preserving the “competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better healthcare for all Americans”. Anthem said it’s ready for a court fight but is also open to a settlement with the Justice Department.
Anthem is based in Indianapolis, Indiana.
Many markets only have two or three companies offering health insurance policies, and in many of those with less competition, insurance costs are rising significantly.
It also said there were issues with local business markets, the individual exchanges and the impact that a combined company could have on contracts with doctors.
In the complaint against Anthem and Cigna, the DOJ raised concerns about competition in the sector.
In a separate release, Cigna, the nation’s fourth-largest health insurer, said it was “evaluating its options consistent with its obligations under the agreement”. A combined company would serve only 8 percent of total Medicare beneficiaries.
Consumers Union applauded moves to stop the deals. Health-care providers would also be hurt, with the deal likely leading to “lower reimbursement rates, less access to medical care, reduced quality”.
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.
AG spokesperson Harlow B. Sumerford didn’t immediately respond for comment as to why Tennessee did not join the second lawsuit.
The mega-mergers would significantly reduce the number of health insurers across the country.
The Justice Department says the proposed mergers violate anti-trust laws and would lead to higher premium and health care costs for Americans.
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Both Aetna and Humana sell the Medicare alternative plans in New Castle and Kent counties.
