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Antitrust officials sue to block mergers of four major U.S. health insurers

Saheli July 29, 2016 Health Comments Off on Antitrust officials sue to block mergers of four major U.S. health insurers

U.S. justice officials on Thursday filed a pair of lawsuits to block two proposed mergers among four of the United States’ largest health insurers, over concern that the combinations might stifle competition and lead to higher premiums.

U.S. Attorney General Loretta Lynch announced the lawsuits, which aim to block deals between Aetna and Humana and Anthem and Cigna.

Both proposed mergers were announced last summer and would produce two companies with a combined estimated value of more than $90 billion.

Antitrust regulators, though, fear that the combined companies might not be in the best interests of American consumers.

“Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve,” Lynch said in a statement Thursday. “These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies.”

“Our actions seek to preserve competition that keeps premiums down,” she added.

The estimated value of the Anthem-Cigna merger is $54 billion — and Aetna-Humana, $37 billion.

“The proposed mergers would eliminate two innovative competitors — Cigna and Humana — at a time when competition has been pressuring insurers to develop new models of care designed to keep Americans healthier, to deliver healthcare more efficiently and to control the costs of providing care,” Justice antitrust official Sonia Pfaffenroth said. “The department will continue to work with our state colleagues to protect competition and innovation in this vitally important industry.”

U.S. officials said 11 states have joined the Justice Department in opposing the Anthem-Cigna merger — California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia. Eight states — Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania and Virginia — oppose Aetna’s acquisition of Humana.

Aetna and Humana responded Thursday by pledging to “vigorously” defend their merger plans.

Anthem is the United States’ second-largest health insurer, followed directly by Aetna, Cigna and Humana.

[Source:- UPI]

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