US Justice Department Steps In to Halt Health Insurance Mega-Mergers
Many credited the reporting of International Business Times journalist David Sirota for drawing attention to potentially deleterious deals
The U.S. Department of Justice is suing to block two mega healthcare mergers, saying the acquisitions would "fundamentally reshape the health insurance industry" to the detriment of consumers.
The antitrust lawsuits were announced Thursday by Attorney General Loretta Lynch in response to Anthem's $54 billion proposal to acquire Cigna and Aetna's $37 billion bid to takeover Humana.
"If allowed to proceed," Lynch said in prepared remarks, "these mergers would fundamentally reshape the health insurance industry. They would leave much of the multi-trillion dollar health insurance industry in the hands of three mammoth insurance companies, drastically constricting competition in a number of key markets that tens of millions of Americans rely on to receive healthcare."
"If the 'Big Five' were to become the 'Big Three,'" Lynch said, referring to the major health insurance providers, "not only the bank accounts of the American people would suffer—but also the American people themselves."
According to USA Today:
Eleven states and the District of Columbia joined the attempt to block the Anthem deal, which would combine the nation's second and fourth largest insurers. Eight states and D.C. joined the suit to block the Aetna deal, which combined the third and fifth largest.
In particular, USA Today noted, "[t]he Aetna-Humana deal would combine two of the four largest providers of Medicare Advantage plans, threatening to drive up costs for certain seniors, and would undermine competition in public exchanges in Florida, Georgia and Missouri, the government said."
UnitedHealthcare is currently the largest health insurer in the nation.
Indeed, Sirota reported Thursday, the "deal hit turbulence" earlier this year:
There were reports of internal management squabbles between the two companies, and then an International Business Times investigative series about the merger set off a firestorm in Connecticut, which has been leading the national multistate review of the transaction. The series—which prompted a state ethics probe—documented personal and familial ties between Cigna and Gov. Dannel Malloy’s lead regulator on the deal. It also documented how Cigna and Anthem had pumped significant campaign contributions into Malloy-linked political groups as his administration led the merger review.
On Twitter Thursday, Sirota called the exposé "one of the biggest investigative stories of my career."
CNN reports that "[b]oth Anthem and Aetna said they intend to fight the suits."