Recently, a federal judge blocked Anthem’s $54 billion acquisition of Cigna, saying the merger of two of the nation’s largest insurers would make it harder for large national employers to get competitive rates for health insurance. The injunction has been big news because it is so rare to happen. “The evidence has shown that the merger is likely to result in higher prices,” U.S. District judge Amy Berman Jackson wrote in the ruling. The order said further:
Anthem is encouraging the Court to ignore the risks posed by the proposed constriction in the health insurance industry… on the grounds that consumers might benefit from the large size of the new company in other way at the end of the day.
Judge Jackson agreed with the Department of Justice’s argument that the combination of Anthem and Cigna would reduce the number of health insurers able to provide coverage on a national level from four to just two.
Analysts have said for months that the two firms faced an uphill battle because of their overlap in the employer market. “This merger was really a tough one to get through from the get go, because of the concentration of national accounts and there really wasn’t any way to remedy anti-competitive effects,” said antitrust lawyer Matthew Cantor, a partner at the law firm of Constantine Cannon.
The American Medical Association, one of a number of health care groups that had opposed the merger, welcomed the judge’s ruling. “The significant absence of health insurer competition in most markets is detrimental to patients and poses an important public policy problem,” said Dr. Andrew Gurman, president of the American Medical Association, in a statement.
Lawyers at Beasley Allen are working with other firms on the Blue Cross Blue Shield Antitrust multidistrict litigation (MDL) where a major focus is the national accounts market. National accounts are large employers that have employees living in more than one state. Anthem, as a Blue Cross Blue Shield licensee, is a heavy-hitter in that market. According to the opinion, enjoining the merger is necessary because the “high level of concentration in the market that would result from the merger is presumptively unlawful.” By enjoining the merger, Judge Jackson gave a big win to individuals and employers affected by the national accounts market.
If you need more information, contact Rebecca Gilliland, a lawyer in our firm’s Consumer Fraud & Commercial Litigation, at 800-898-2034 or by email at Rebecca.Gilliland@beasleyallen.com.
Sources: opinion and CNBC
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