The Justice Department on Thursday sued to block two health insurance industry mega-mergers, arguing that allowing Anthem to buy Cigna and Aetna to merge with Humana, would harm millions of Americans, raise prices and eliminate competition.
Federal regulators have been mulling over the $54 billion merger between Anthem and Cigna and the $37 billion deal between Aetna and Humana for months. On Thursday, they said the deals would be too harmful to the marketplace to proceed.
Anthem’s acquisition of Cigna, which was proposed last year, would be the largest health insurance industry merger in history. But, the Justice Department said in its suit, “Anthem’s purchase of Cigna likely would lead to higher prices and reduced benefits, and would deprive consumers and healthcare providers of the innovation and collaboration necessary to improve care outcomes.”
In a statement, Cigna indicated that the decision could endanger the deal’s future and the company had not decided how to proceed.
“Given the nature of the concerns raised by the DOJ and the overall status of the regulatory process, which under the terms of the merger agreement was led by Anthem, Cigna is currently evaluating its options consistent with its obligations under the agreement,” Cigna said in a statement. “In light of the DOJ’s decision, we do not believe the transaction will close in 2016 and the earliest it could close is 2017, if at all.”
Anthem lashed out at the lawsuit and the “flawed analysis” used by antitrust officials, adding that they are plan to move forward with the deal, either by challenging the suit or by reaching a settlement.
SOURCE: Renae Merle and Carolyn Johnson
The Washington Post