- The Justice Department could decide to file lawsuits to block the Aetna-Human and Cigna-Anthem megamergers as early as this week, Bloomberg reports.
- According to sources close to the matter, offers to unload assets are unlikely to assuage antitrust concerns that the deals would cripple competition in the health insurance market.
- Shares of all four stocks closed at a loss Tuesday morning: Humana, $153.38 from $159.64; Aetna, $115.15 from $118.45; Cigna, $130.30 from $133.08; and Anthem, $132.06 from $133.44.
Antitrust officials are alarmed the proposed deals would shrink the insurance industry from five major players to three. Bill Baer, the Justice official overseeing the mergers, has called them “transformational” and a “game changer” for the insurance marketplace, Bloomberg notes.
HHS Secretary Sylvia Mathews Burwell has also stressed that competition among payers can lower costs and improve the quality of patient coverage, according to LifeHealthPro.
If DOJ does decide to challenge the mergers, those lawsuits could be joined by states that have raised antitrust concerns. The companies have agreed to contest any lawsuits in court.
Aetna execs met with DOJ officials earlier this month to discuss whether divestitures would ease antitrust concerns for the pending merger with Humana. The Hartford, CT, insurer has been rumored to express interest it would sell Medicare Advantage assets worth several billion dollars to lessen its overlap with Humana, if the deal goes through.
An analysis last year by the Kaiser Family Foundation found that an Aetna-Humana marriage would give the combined company at least half of all Medicare Advantage enrollees in 10 states and two-thirds of enrollees in five states.
By al accounts, industry experts believe that the Aetna/Humana deal has a greater chance to pass than the Cigna and Anthem merger. Taking California as an example, 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 pending Cigna merger, which has raised concerns about competition. California Insurance Commissioner Dave Jones has consistently challenged large insurers as a consumer advocate.