Health Insurance Mergers

Is bigger necessarily better? The U.S. Department of Justice (DOJ) doesn’t seem to think so. There are numerous published reports indicating the DOJ plans to file a lawsuit to block two health insurance mergers.

From the New York Times:

Antitrust officials are concerned that Aetna’s $37 billion deal with Humana, and Anthem’s $48 billion pursuit of Cigna, will harm competition in the health insurance industry, said the person, who spoke on condition of anonymity because the suits had not yet been filed. The deals would have decreased the number of the largest insurers to three, from five.

The Justice Department’s final decision is expected this week or next, the person said.

According to the Wall Street Journal, “The companies…..have been given the chance to try to persuade the department that any antitrust problems raised by the deals could be addressed by shedding assets to competitors. The department has been skeptical that asset sales, or divestitures, would adequately preserve the current level of competition.

From CNBC.com:

Spokespeople for Cigna and Anthem declined to comment. Humana officials weren’t immediately available to comment.

An Aetna spokesman declined to comment, saying, “We do not comment on rumor or speculation. We remain steadfast in our belief that this deal is good for consumers and the health care system on the whole.”

A story on BusinessInsurance.com suggests the health insurers will fight for the deals in court if the DOJ does file a lawsuit. “We expect both companies will sue to block such a U.S. Department of Justice order, though view (Anthem-Cigna’s) chances at winning as slim,” Ana Gupte, an analyst at Leerink Partners L.L.C., said Tuesday in a research note. “Our view has been that if logic and rational thinking play a primary role in the decision, that both deals should be allowed to proceed,” Thomas A. Carroll, an analyst at Stifel Nicolaus & Co., said Tuesday in a research note. “However, if politicking takes hold, it will be difficult to forecast a result.”

Share your thoughts on the mergers and on the DOJ’s reported plans to try to block them. What will this mean to the people of Arizona? Do you think it will have any effect at all? Creating constructive dialogue around the health issues making headlines is just one of the many ways we are working toward our goal of one day making Arizona the Healthiest State in the Nation!

 

 

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