Jones Says Anthem-Cigna Deal Raises Consolidation Concerns
On Friday, California Insurance Commissioner Dave Jones (D) said his office will "carefully review" the proposed merger between insurers Anthem and Cigna, the San Jose Mercury News reports (San Jose Mercury News, 7/25).
Last week, Anthem announced it has agreed to acquire Cigna for $48.4 billion. The total deal, including debt, is valued at $54.2 billion.
The combined company would have about 53 million customers, which would make it the nation's largest insurer in terms of enrollment.
The companies estimated that the deal, which requires approval from shareholders and federal regulators, will close in the second half of 2016. However, the deal could face challenges receiving approval from U.S. regulators (California Healthline, 7/24).
If the acquisition is approved, Anthem could become California's largest health insurer overall, surpassing Kaiser Permanente, the Los Angeles Times reports. Anthem already is the state's largest for-profit insurer.
Currently, Kaiser leads California in total enrollment with 7.8 million members as of April. Meanwhile, Anthem has about 6.1 million policyholders in the state, and Cigna has about 2.1 million California policyholders.
An Anthem spokesperson said the company expects to be the largest California insurer if the deal is approved (Terhune, Los Angeles Times, 7/24).
Jones Raises Concerns
In a statement Friday, Jones said the California Department of Insurance would review the proposed Anthem-Cigna deal and any others that might follow (San Jose Mercury News, 7/25).
Jones said, "We will review the mergers based on what is best for California consumers and employers."
He said, "California's health insurance market already suffers from consolidation, with the four largest health insurers in the individual market controlling more than 85% of the market," adding, "Further consolidation will result in even less competition among health insurers and will leave consumers and employers with fewer choices and the potential for greater premium increases" (DOI release, 7/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.