US antitrust officials on Thursday moved to block an unprecedented consolidation of the national health insurance market, filing suit against Anthem Inc’s proposed purchase of Cigna Corp and Aetna Inc’s planned acquisition of Humana Inc.
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A proposed merger between health insurance giants Aetna and Humana would drive up prices, according to a lawsuit blocking the plan. The deals, Attorney General Loretta Lynch said in a news conference, would reduce competition in the health care market, resulting in higher prices for consumers. “There are too many unanswered questions and too much at stake in reducing competition for Tennessee to support this merger”, Attorney General Slatery said.
In a statement, Connecticut-based Aetna said there is robust competition in Medicarec and that they will vigorously defend their proposed merger.
The U.S. Department of Justice also has filed a lawsuit to block Anthem’s proposed acquisition of Cigna, for the same reasons. Anthem said it plans to fight the federal suit, but Cigna said it is “currently evaluating its options consistent with its obligations under the agreement” with Anthem.
Both sets of health insurers opposed the Justice Department’s challenge.
The state of CT joins the Department of Justice and other states in the lawsuit against the Anthem-Cigna Merger.
Anthem is the United States’ second-largest health insurer, followed directly by Aetna, Cigna and Humana. Anthem has an unwavering commitment to enhancing access to affordable healthcare and the benefits and efficiencies from its merger with Cigna is one way that Anthem will continue its mission of improving consumer choice, quality and affordability.
The coalition said said hospital groups encouraged Bondi to reject the mergers since they could lead to a loss in competition.
CT did not join the lawsuit against Aetna and Humana because “any direct anticompetitive effects of this merger are unlikely to have a significant impact in CT”, state Attorney General George Jepsen said.
“A combined company is in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage plans”, the insurers said.
Anthem and Cigna are major competitors, especially covering large employers, in California.
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But anti-trust regulators say having fewer big insurers will reduce the competition to offer customers lower prices and more innovative plans and services. Cigna, Aetna and Anthem shares were all up about 3 percent. They add that they “look forward to making this clear in court, where a judge will review the transaction based on its merits”.
