DOJ Sues To Block Health Care Mega-Mergers; Calif. Joins Feds Against Anthem-Cigna Deal
The department says the Aetna-Humana and Anthem-Cigna deals would lead to higher prices and reduced benefits for consumers. California Attorney Gen. Kamala Harris joined in, saying the mergers would “threaten the availability and quality of medical care” around Los Angeles and other California markets.
Los Angeles Times:
Obama Administration Moves To Block Health Insurance Mega-Mergers
The Obama administration went to court Thursday to block two major health insurance mergers, siding with consumer advocates and medical groups worried that the consolidation of large national health plans could lead to higher premiums. The long-anticipated move by the Justice Department and attorneys general in California and 10 other states, will at least temporarily prevent Anthem Inc.’s $48-billion purchase of Cigna Corp., a combination that would create the nation’s largest health insurer. And it will stop Aetna Inc.’s $34-billion bid to acquire Humana Inc., a merger that would have combined the nation’s third- and fifth-biggest health plans. (Levey and Puzzanghera, 7/21)
KQED:
California Attorney General Joins Federal Suit To Block Anthem-Cigna Merger
California Attorney General Kamala Harris is joining a federal Justice Department antitrust lawsuit to block the proposed health insurance mega-merger between Anthem and Cigna, a consolidation that would create the country’s largest health insurer. While Harris acknowledged that mergers can create benefits for consumers, this deal “does not strike that balance and would drive up costs for consumers and reduce access to quality healthcare for millions of Californians,” she said in a statement. The lawsuit was filed by the Justice Department and attorneys general in nine other states, in addition to California. (Aliferis, 7/21)
USA Today:
Hospitals, Doctors Funded Consumer Opposition To Insurance Mergers
Hospital and doctor groups helped fund the consumer opposition to the two big health insurer mergers the Justice Department sued to block Thursday. Hospitals, which have been merging fast and furiously on their own, jump started the campaign against the mergers of Aetna and Humana and Anthem and Cigna by funding the Campaign for Consumer Choice with unions. Insurers said they needed to consolidate to deal more effectively with ever-larger hospital companies, which have also been gobbling up doctors' practices. (O'Donnell, 7/21)
The Wall Street Journal:
Antitrust Suits Could Upend Health Insurers’ Strategies
If the Justice Department wins its two health-insurance antitrust cases, the four companies involved would face business challenges as they move forward alone. All four— Aetna Inc., Humana Inc., Anthem Inc. and Cigna Corp.—would be left without the additional scale that they said would help them pare costs and boost their products. They would remain substantially smaller than the industry’s largest player by revenue, UnitedHealth Group Inc., and could turn to other smaller deals to gain at least some heft in key markets. (Wilde Mathews, 7/21)
Reuters:
Aetna, Humana Map Legal Strategy To Salvage Merger
Health insurer Aetna Inc, whose $33 billion purchase of Humana Inc has been spurned by the U.S. government, faces a tough but not impossible legal battle to try to reinstate the deal. Aetna vowed to fight “to the very end” after the Department of Justice filed suit earlier on Thursday to block the merger, which had been in the works for more than a year. Antitrust reviewers say the combination will hurt consumers and the companies' proposed fix - selling some health plans to a competitor - is insufficient. (Humer, 7/22)