During a hearing in San Francisco last week, California State Insurance Commissioner Dave Jones admitted that he still has reservations about Anthem’s proposed $54.2 billion purchase of Cigna.
“I am considering what is best for consumers and the overall marketplace,” the commissioner said in a statement. “Anthem and Cigna bear the burden of demonstrating this proposed merger is in the best interest of the California consumers and health care marketplace.”
Executives from both companies faced the California Department of Insurance during the hearing, as well as a panel of physicians and consumer advocates, detailed an article on the KQED News website. Both were questioned about the benefits to be gained following the merger.
The companies jointly said that the merger “will result in easier access to medical providers for patients and lead to more affordable health insurance policies,” and that their costs would be cut by $2 billion annually.
Learn the factors impact the cost of affordable health insurance with this article.
While the executives were “quite confident” in their estimate, they could not say with all certainty if the merger would also translate into savings for their customers. The executives mentioned that there are certain factors that are simply out of their control, such as the rise in prices of specialty drugs.
UC Berkeley health economics and policy professor Brent Fulton, who presented an analysis of the merger during the hearing, noted that the consolidation could theoretically lead to improved negotiating leverage with health care service providers and potentially lower costs for health insurance consumers.
Consumer advocates present at the hearing remarked that the acquisition could exacerbate health insurance problems. Notably, the advocates claimed that Anthem was dealing with “inaccuracies in provider directories, low quality ratings and poor management of grievances.”
The California Department of Managed Health Care is anticipated to impose restrictions on the deal to address consumer concerns about the large consolidation.
