Insurance Update

U.S. DOJ Move to Block Health Insurer Mergers Consistent with CA Commissioner's Recommendation
July 21, 2016

The US Department of Justice (DOJ) sued to block two separate mergers—Anthem Inc.’s $48 billion takeover of rival health insurer Cigna Corp. and Aetna Inc.’s $37 billion bid for Humana Inc., which would consolidate the top five insurers into three larger companies.

The DOJ cited many reasons for the antitrust lawsuits however the chief concern was the harm the mergers would cause to competition, to consumers, and the resulting lack of innovation should the companies finalize the merger. Three of the companies said they would fight the lawsuit, which could result in a drawn out court battle or a round of brand new deals.

CAMFT has been monitoring the proposed mergers since July 2015 and has previously written two letters to the California Insurance Commissioner that now echo the concerns of the Justice Department. Notably, CAMFT was concerned about patient choice, lack of competition, increase in power for the insurers, and an increase in premiums for patients. As the lawsuits progress, CAMFT will keep its members up to date.

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