Anthem proposed to acquire Bloomfield-based Cigna for $54 billion and Hartford-based Aetna sought Humana Inc. for $37 billion.
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The Department of Justice, along with attorneys general from multiple states and the District of Columbia, have sued to block Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana. “If the mergers take place, the competition among insurers that have pushed them to provide lower premiums and higher-quality care would be eliminated”.
Among other things, the suit alleges the merger would reduce the number of Medicare Advantage competition in 350 counties in 12 states. “And competition would be substantially reduced for hundreds of thousands of families and individuals who buy insurance on the public exchanges established under the Affordable Care Act”, said Lynch.
In the past year alone, Los Angeles-based HealthNet merged with Centene Corp., a leading Medicaid plan. In March, Oakland’s Kaiser Permanente acquired Seattle’s Group Health Cooperative. In a May speech, Federal Trade Commission Chair Edith Ramirez said consolidation in the health-care industry is accelerating and has helped drive up prices in parts of the country.
Aetna and Humana said in a statement that they will “vigorously” fight to complete their deal.
In its own report, Missouri’s insurance department found that post-merger, the combined company’s market share in individual Medicare Advantage plans would exceed 70 percent in 33 counties.
Amthem and Cigna had different tones however, as the former said it is “fully committed to challenging the DOJ’s decision in court but will remain receptive to any efforts to reach a settlement”. Anthem called the suits an “unfortunate and misguided step backwards for access to affordable health care for America”, CNN Money reported. The company said it did not believe any deal would be possible before 2017 at the earliest, “if at all”. The government is concerned about the so-called “Big Five” becoming the “Big Three”.
If the mergers go through, the AMA warned that the big insurers would “develop strangleholds on local markets” and “exert control over the delivery of health care”.
The merger “would deprive consumers and healthcare providers of the innovation and collaboration necessary to improve care outcomes”, the suit said. The two deals involve four of the state’s nine largest health insurers with more than $17 billion in Florida premiums.
Such a move would be a blow to the president’s state-focused Obamacare. The bulk of the nation’s healthcare insurance industry would be controlled by a few companies, according to the plaintiffs.
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The Department of Justice (DOJ) doesn’t get healthcare?
