The Aetna spokesman said his company is prepared to argue that there are several ways to ensure there’s enough competition in the market for health plans for the elderly, known as Medicare Advantage, a person familiar with the matter told Bloomberg.
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U.S. Attorney General Loretta Lynch said that the deals, if allowed to proceed, “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies”. For the healthcare providers such as doctors and hospitals, they may receive lower payments from insurers because the insurers will obtain greater purchasing power from market concentration.
The lawsuits were filed in the Washington DC federal court against Anthem Inc’s proposed purchase of Cigna Corp. and Aetna Inc’s acquisition of Humana Inc. “It is important that we do everything we can to preserve competition in these markets”.
Eleven states and the District of Colombia joined the DOJ suit against Anthem and Cigna; eight states and DC joined the suit against Aetna and Humana.
Tennessee is joining attorney generals from 11 states and the District of Columbia in litigation to block the merger, which is valued at $54 billion. Aetna, based in CT, trails right behind Anthem, operating in every state to the tune of $60 billion in reported revenue. The nation also needs an independent health consumer advocate to monitor trends in the health care markets and represent the public’s interest during merger reviews.
A federal judge will decide whether the mergers can withstand antitrust provisions – and although there is no guarantee the Justice Department will prevail, corporations often choose to give up instead of waging an uncertain, lengthy and costly fight against the government.
Humana is the second-largest Medicare Advantage insurer, providing coverage to 3.1 million individuals across the country, while Aetna is the fourth-largest.
Balto isn’t surprised that the DOJ was unwilling to accept the companies’ proposed remedies to concerns about their effect on competition, given antitrust officials’ skepticism about the merits of such fixes in recently challenged deals.
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The proposed merger between Anthem and Cigna, which would cover as many as 53 million people, and the planned $37 billion Aetna-Humana deal have been controversial from the start, with state insurance commissioners, including California’s, questioning the value for consumers. “In New Hampshire, competition has inspired health insurers to explore new and innovative methods of providing and paying for health care while working to keep prices under control”. Alternatively, the companies could come to an agreement to abandon the deal or settle with the USA before or after a suit is filed.
