California moves to block Anthem-Cigna deal

CAL/AAEM News Service at
Sun Aug 7 11:11:22 PDT 2016



July 21, 2016


California moves to block Anthem-Cigna deal 



-deal-8401727.php> SFGate



By Victoria Colliver


California joined U.S. Justice Department antitrust lawsuits filed Thursday
in an effort to block the merger of two major health insurers - Anthem
Inc.'s bid to buy Cigna Corp.


The Justice Department also sued to block Aetna Inc.'s proposed acquisition
of Humana Inc., citing concerns that the two megamergers would drastically
constrict competition in key markets, drive up premiums and reduce quality.


California Attorney General Kamala Harris said the proposed $48.3 billion
merger between Anthem and Cigna, which would create the nation's largest
health insurance company, would "drive up costs to consumers and reduce
access to quality health care for millions of Californians."


"We must not allow insurance companies to grow their profits at the expense
of consumers," she said in a statement. Officials from Harris' office said
the state did not join the federal complaint against the Aetna-Humana deal
because of the companies' limited market share in California.


In addition to California and the District of Columbia, other states joining
the lawsuit are Colorado, Connecticut, Georgia, Iowa, Maryland, Maine, New
Hampshire, New York, Tennessee and Virginia.


Health care has been undergoing a wave of consolidation, including the
recent merger that involved Health Net, which is in Woodland Hills (Los
Angeles County), and Missouri's Centene Corp. In March, Oakland's Kaiser
Permanente acquired Seattle's Group Health Cooperative.


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.


California Insurance Commissioner Dave Jones on Thursday applauded the
federal government's stance and said the merger, if approved, would do
"irreparable harm to consumers and businesses."


"Bigger is not better when it comes to health insurance mergers," Jones
said. "History has shown that health insurance mergers result in higher
prices, fewer choices and lower quality of care."


Both sets of health insurers opposed the Justice Department's challenge.


Anthem, based in Indianapolis, called the action "an unfortunate and
misguided step backwards for access to affordable health care for America,"
and said that it was based on "a flawed analysis and misunderstanding of the
dynamic, competitive and highly regulated health care landscape."


The Thursday news came on the heels of an announcement by Covered
California, the state health insurance marketplace created by the Affordable
Care Act, that premiums in plans offered to consumers through the exchange
will go up by an average of 13.2 percent in 2017 after years of modest 4
percent increases.


"Health care premiums are high enough, without major insurers merging and
reducing choice and competition further," said Anthony Wright, executive
director of Health Access California, a consumer group that supported the
federal health law. "We hope this action starts a new wave of both federal
and state scrutiny regarding consolidation in the health care industry at
both the insurer and provider level." 




Jeff Wells
Deputy Editor, CAL/AAEM News Service


Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

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