Antitrust officials at the U.S. Department of Justice may file lawsuits to block health insurer Anthem’s proposed $54 billion acquisition of Cigna as well as Aetna’s pending $37 billion takeover of Humana, according to a Bloomberg article posted Tuesday.
The article, written by Bloomberg writers David McLaughlin and Sara Forden, cites “a person familiar with the matter,” as saying that the Justice Department could take action on the deals this week.
Matt Asensio, a Cigna spokesperson, declined to comment on the Justice Department review. Requests for comment from Anthem, Aetna and Humana representatives were not returned, as of press time.
As previously reported by Healthcare Informatics' Editor-in-Chief Mark Hagland, in early July 2015, Hartford-based Aetna announced that it would acquire Louisville-based Humana for $37 billion in cash and stock, which was, at the time, the largest acquisition of its type in the history of health insurance in the United States.
As Healthcare Informatics' Managing Editor Rajiv Leventhal reported a few weeks later, Indianapolis-based health insurer Anthem struck a deal to acquire Bloomfield, Ct.-based Cigna for $54.2 billion, now the largest health insurance transaction in the U.S.
Those two deals would significantly change the U.S. health insurance industry by consolidating the five biggest competitors into three major players.
According to the Bloomberg article, several people familiar with the situation reported that Justice Department officials, “who are responsible for protecting competition, are concerned that the deal would harm customers.”
McLaughlin and Forden also reported, “While the companies may offer to sell assets to gain approval for the deals, that’s unlikely to sway antitrust officials, one of the people said. The final decision on whether to sue to block the deals could come this week or next, another of the people said. The companies could settle a lawsuit before or after one is filed.”
And, they wrote, “In addition to the Justice Department’s antitrust division, state attorneys general also have raised concerns about the mergers and may join any Justice Department challenge, two people said.”
In June, U.S. Senators Richard Blumenthal (D-CT), Al Franken (D-MN), Elizabeth Warren (D-MA), Sherrod Brown (D-OH), Edward J. Markey (D-MA), Dianne Feinstein (D-CA), and Mazie K. Hirono (D-HI) called on the Department of Justice to block the proposed health insurer mergers, which were undergoing review at the time. In a letter to Renata Hesse, principal deputy assistant attorney general, antitrust division at the Department of Justice, the senators voiced concerns that the proposed Aetna-Humana and Anthem-Cigna mergers could threaten jobs, increase premiums, and decrease access to quality health care.
When the Aetna-Humana deal was announced, Healthcare Informatics' Hagland wrote that a report in the American Journal of Managed Care online noted, “The deal, which has been approved the boards of directors of both companies, continues the trend of consolidation that has swept the healthcare industry since passage of the ACA. Some fear that ongoing consolidation will thwart competition and drive up prices for consumers, undermining a key goal of the law.”
Healthcare Informatics will continue to post updates on developments as they occur.