Dive Brief:
- U.S regulators have filed suit to block the mergers of large insurers Anthem/Cigna and Humana/Aetna, Reuters confirms.
- The New York Times, through an anonymous source, reported yesterday that the DOJ is going to mount legal challenges blocking the deals, which had Aetna offering $37 billion to buy Humana and Anthem doing the same in its $48 billion bid for Cigna.
- Both deals, antitrust regulators believe, would "harm competition in the health insurance industry" by cutting the number of the largest insurers to just three. The suit takes place in nine states and the District of Columbia.
Dive Insight:
Update: The Justice Department made its antitrust announcement today, and it will sue to block the mergers.
Yesterday, Anthem and Cigna offered no comment and Humana didn't respond. Aetna's spokesperson told the Times “We don’t comment on rumors and speculation, but we are steadfast in our belief that this deal is good for consumers and the health care system as a whole."
Of course, the mergers would have a serious impact on the health insurance marketplace for employers (large ones in particular), and by extension employees. Only the largest healthcare carrier, UnitedHealth Group, has no merger plans in the works. No one could predict how the mergers would affect costs for employers, though the merger proponents say the economies of scale would work in favor of employers cost-wise.
Even back in May, there was public indication that Anthem's pursuit of Cigna faced problems. As is the case with most situations like this, the two acquiring giants are likely to fight back by making their case in court.
