CA insurance commissioner pleads to DOJ to block Anthem/Cigna
- California Insurance Commissioner Dave Jones on Thursday pleaded to the Department of Justice to block the planned merger between insurance uber-giants Cigna and Anthem.
- Jones sent a 22-page letter to the DOJ outlining why he believes the intended merger will not benefit patients.
- There are currently three main insurers that constitute 75% of the California market: Kaiser Permanente (42%), Anthem (20%), and Blue Shield of California (15%). Anthem's market position would be increased by the merger, which has raised concerns about competition. Jones has consistently challenged large insurers as a consumer advocate.
"When it comes to the Anthem and Cigna merger, bigger is not better for California's consumers or the health insurance market," Jones said of the pending $54 billion merger.
"I have reviewed the likely effects of the proposed merger on competition in California health insurance markets and concluded that it is more than reasonably probable that it will substantially lessen competition based on the factors recited in the DOJ and FTC Horizontal Merger Guidelines," Jones wrote in his letter.
One of the issues is Anthem and Cigna have signficant overlaps in the California market share and a merger of this magnitude have had some speculate that it would reduce competition in 31 of 58 state counties.
He disputes the companies' claim that the merger will create $2 billion in savings. "They refused to guarantee consumers and businesses will see the benefit of any potential savings in reduced prices," he said.
Jones is the first insurance regulator to oppose the merger of Anthem and Cigna.
In addition to heat from Jones, the companies do have to sort out the bickering between each other.
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