On June 23, 2016, California Insurance Commissioner Dave Jones submitted a letter urging the Department of Justice, Antitrust Division (DOJ) to block the proposed merger between Aetna, Inc. (Aetna) and Humana, Inc. (Humana). This letter comes a week after Jones’ June 16, 2016 submission urging the DOJ to block the proposed merger between Anthem, Inc. (Anthem) and Cigna Corporation (Cigna).
Aetna’s plan to purchase Humana for $37 billion has been under substantial antitrust scrutiny by federal and state authorities since it was announced last July. Aetna and Humana have disclosed that the merger would create the second-largest managed care company in the United States, with more than 33 million medical members and would give Aetna more than a quarter of the Medicare Advantage market nationwide, which is more than any other insurer. Jones claims the acquisition will increase costs for customers and decrease the quality of and access to available care. The American Hospital Association (AHA), seven U.S. senators, and the Missouri Department of Insurance have also opposed the merger on antitrust grounds, though fifteen states and California’s Department of Managed Health Care have approved the merger. These approvals have been tempered with stipulations that Aetna make investments in particular communities and divest certain assets.
Anthem’s plan to purchase Cigna for $54 billion was also announced last July and has faced similar scrutiny. If approved, Anthem would become the largest health insurer in the nation. Jones held a public meeting in March to interview Anthem and Cigna representatives on their plans for sharing the anticipated $2 billion in savings from the transaction with consumers. Jones concluded that the companies had not made plans to reduce insurance costs for consumers, nor was he convinced quality of care would improve. The AHA, American Medical Association, and the same senators have also opposed this merger.
Reporter, Paige Fillingame, Houston, +1 713 615 7632, pfillingame@kslaw.com.
