On Thursday, California Insurance Commissioner Dave Jones called Anthem’s proposed $48 billion acquisition of Cigna “anti-competitive,” citing that the deal would hurt consumers, businesses, and the state’s health insurance market.
“When it comes to the Anthem and Cigna merger, bigger is not better for California’s consumers or the health insurance market,” the commissioner remarked in a written statement.
According to Jones, if the deal is approved, Anthem’s market share would exceed 50% in 28 counties in California and 40% in another 38 counties. This, he said, would adversely affect consumers “with likely reductions in access, quality of care and affordability of health insurance.”
The Anthem-Cigna deal currently awaits approval from insurance regulators of the 26 states that would be affected by the merger, reported Indianapolis Business Journal
. To date, 12 states have approved the merger, with the Indiana Department of Insurance the latest to have voiced its endorsement on May 26.
The Department of Justice has yet to disclose when it would rule on the deal.
While the state of California held a public hearing March 29—where members of the public, executives of Anthem and Cigna, consumer advocates, medical professionals, and merger experts were free to share their thoughts on the acquisition—Jones felt that Anthem did not provide adequate evidence for its claim that the deal would result in $2 billion in efficiencies. He also noted that the company did not give any guarantee that any savings as a result of the merger would benefit consumers with lower prices.
“Anthem provided only vague, speculative and impossible-to-verify assertions,” he said.
Anthem issued a statement Thursday in response, saying that it has been working closely with federal and state regulators for 10 months.
“We do not believe that the California Department of Insurance’s opinion is based on the true merits of this transaction,” the company said. “We are confident that the highly complementary nature and limited overlap of our organizations that will benefit the complex and competitive health insurance markets will be reviewed on the facts by the DOJ and appropriate state authorities.”
Increased opposition plagues pending health insurance mega-mergers
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