California Regulator Opposes Anthem-Cigna Merger

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The insurance regulator for the State of California is not in favor of the $48.4 billion merger between health insurance companies Anthem (ANTM) and Cigna (CI), which was announced last summer. (TheStreet)

Insurance Commissioner Dave Jones does not have the authority to block the merger. But he said he had reviewed evidence presented at a March 29 hearing, as well as studies of past mergers, and concluded that the deal was “anti-competitive.” (The Los Angeles Times)

In a letter to the Justice Department, Jones described California’s $122.9 billion health insurance market as “highly concentrated,” and accused Anthem of “a history of implementing substantial and unreasonable premium increases in California.” (Reuters)

The acquisition will lead to market consolidation and greater concentration in the already saturated health insurance market in California. According to Jones’ office, in case the acquisition materializes, the new Anthem would control more than 50% of the market in 28 of the state’s counties and over 40% of the market in 38 counties. This would mean more power in the hands of the company, which will gain in size and scale. (Zacks)

Read More:

Cigna Beats Earnings With Help from Medicare Advantage Business

Anthem Benefits from Affordable Care Act Enrollments

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