Regulators were anxious about how the deals will affect competition in three areas in particular: coverage offered by large employers, insurance sold on the Affordable Care Act’s public exchanges and Medicare Advantage plans, which are privately run versions of the government’s Medicare program for the elderly.
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USA justice officials on Thursday filed a pair of lawsuits to block two proposed mergers among four of the United States’ largest health insurers, over concern that the combinations might stifle competition and lead to higher premiums.
The Justice Department would like to consolidate the two cases for trial before the same judge, according to the Wall Street Journal. Anthem commented that it is fully committed to challenge the lawsuit in court, but may also reach a settlement as well.
The antitrust lawsuits are a bold response by the Justice Department to aggressive efforts by the nation’s leading health insurers to consolidate.
Health insurance rates this year overall rose by an effective 8 percent, Gaba says, higher than in the past few years. Instead, 2016 would be on pace to break records for the scope of withdrawn deals, with $723 billion of deals being abandoned so far this year.
“When it comes to the Anthem and Cigna merger, bigger is not better for California’s consumers or the health insurance market”, Jones said. The division was successful in blocking oil field services company Haliburton in acquiring Baker Hughes and in blocking retailer Staples from purchasing Office Depot. Government officials are said to be concerned about the effect of the mergers on consumers. The news of the possible lawsuits caused stock prices with all four companies to drop. That was followed three weeks later by Anthem’s bid to buy Cigna for US$54.2 billion.
Aetna’s deal is one of two massive transactions that stand to reshape the US health-insurance market.
“Both Anthem and Cigna have a significant presence in Connecticut’s healthcare market”.
A key part of discussions between Aetna and regulators is determining if the market includes just Medicare Advantage plans, which are privately available, or including the broader Medicare market that includes government plans.
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A coalition of consumer and physicians groups have repeatedly called for Bondi to investigate the mergers. Merging the two companies would send premiums higher and increase administrative costs, according to state officials. Even if the larger companies were able to drive down the prices they paid for care from hospitals and doctors, critics anxious those savings would not flow to the people covered under the plans.
