USA antitrust enforcers on Thursday filed lawsuits challenging Anthem Inc.’s proposed acquisition of Cigna Corp. and Aetna Inc.’s planned combination with Humana Inc., alleging the mergers would produce an unacceptable reduction in competition.
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The statement from Aetna and Humana read, “Aetna and Humana Inc. today announced plans to vigorously defend the companies’ pending merger in response to a U.S. Department of Justice (DOJ) lawsuit seeking to block the transaction”.
“Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve”, Lynch said in a statement Thursday.
CT is one of 11 states that joined the DOJ’s lawsuit against the Anthem-Cigna merger plans, but the state did not join eight states that joined the suit to block the Aetna-Humana deal. Experts say that could involve selling off small pieces of the company that raised concerns about competition. They have said the acquisitions would lead to better negotiated prices for drugs and medical services with pharmaceutical companies, hospitals and doctor groups, resulting in lower costs to employers, individuals and customers.
Humana’s significant outlook increase was helping fuel its shares, while “the strong wording from their press releases as far as their intention to fight the Justice Department in court over these lawsuits I think has encouraged a lot of investors”, said Morningstar analyst Vishnu Lekraj. Anthem and Cigna are two of the top five national health insurance carriers in the United States, and Anthem is the second largest carrier in New York State. Aetna aggressively defended its stance and support of their merger with Humana, which they insist is different from the merger details between Cigna and Anthem. The company said it did not believe any deal would be possible before 2017 at the earliest, “if at all”.
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. They have been particularly concerned about consolidation in the health-care industry.
Antitrust enforcers have won most of the cases they have brought in recent years, though there have been occasional setbacks, including court rulings that went against Federal Trade Commission challenges to hospital mergers.
The Department of Justice said the two compete head to head in many markets and that by taking over Cigna, the “slow to innovate” Anthem would eliminate the threat from a more agile and effective rival.
“We all, including seniors, everyday workers and the previously uninsured and underinsured, deserve affordable health insurance options”, Baer said.
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These Wall Street driven deals would have had on our health care system, health advocates said.
