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July 09, 2016

DOJ Files Antitrust Lawsuit Against Anthem-Cigna and Aetna-Humana

Surabhi Dangi-Garimella, PhD
The US Department of Justice (DOJ) has filed an antitrust lawsuit to prevent planned megamergers in the health insurance industry.
The US Department of Justice (DOJ) filed an antitrust lawsuit earlier today to prevent planned megamergers in the health insurance industry. Citing the mergers as a potential barrier to innovation in the sector, the DOJ said it could also raise healthcare costs.

The lawsuit says, “Today, the industry is dominated by five large insurers commonly referred to as 'the big five. In a scramble to become even bigger, four of the big five now propose to merge: Anthem seeks to buy Cigna for $54 billion, and Aetna seeks to acquire Humana for $37 billion. These mergers would reshape the industry, eliminating two innovative competitors — Cigna and Humana — at a time when the industry is experimenting with new ways to lower healthcare costs.”

The lawsuit to block the merger between Anthem-Cigna and Aetna-Humana has support from 9 states and the District of Columbia. The insurance commissioner of California, which is 1 of the 9 on the lawsuit, had declared the Anthem-Cigna deal would be anti-competitive and could lower the quality of patient care. Aetna, meanwhile, had been taking steps to prevent the development of antitrust concerns, such as plans to sell Medicare Advantage assets.

Anthem released a statement in response to today’s lawsuit, which states: “Today’s action by the Department of Justice is an unfortunate and misguided step backwards for access to affordable healthcare for America. The DOJ’s action is based on a flawed analysis and misunderstanding of the dynamic, competitive and highly regulated healthcare landscape and is inconsistent with the way that the DOJ has reviewed past healthcare transactions,” adding, “Anthem is fully committed to challenging the DOJ’s decision in court but will remain receptive to any efforts to reach a settlement with the DOJ that will allow us to complete the transaction and deliver its benefits at a critical time when American consumers are seeking high quality healthcare services with greater value at less cost.”

Cigna released a statement that predicted the planned merger could be pushed to 2017 “if at all.”

The statement from Aetna and Humana read, “Aetna and Humana Inc. today announced plans to vigorously defend the companies’ pending merger in response to a U.S. Department of Justice (DOJ) lawsuit seeking to block the transaction. A combined company is in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage (MA) plans.”

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