The US Justice Department has officially filed lawsuits to block the proposed billion-dollar mergers between four major health insurance companies, claiming the deals violate antitrust laws and would harm competition and affordability for consumers.
US Attorney General Loretta Lynch explained the decision at a press conference, saying the $37 billion merger between Humana and Aetna and Anthem’s $54 billion proposed acquisition of Cigna would “leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”
“Competition would be substantially reduced for hundreds of thousands of families and individuals who buy insurance on the public exchanges established under the Affordable Care Act,” Lynch said.
The lawsuits, filed Thursday morning, challenge the mergers on the grounds that they would “lead to higher health insurance prices, reduced benefits, less innovation and worse service for over a million Americans” – thus violating US antitrust laws.
The Justice Department was joined in the long-anticipated suit with attorneys general in 11 states, including major players like California.
The legal actions are unlikely to end the maneuvering in the health insurance industry, and Aetna and Humana said in a joint statement Thursday that they plan to “vigorously defend” their deal.
“A combined company is in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage plans,” the insurers said.
Anthem also stressed that it was “fully committed” to challenging the suit in court, but “will remain receptive to any efforts to reach a settlement” that would allow it to complete its takeover of Cigna.
Cigna, meanwhile, said it was “evaluating its option” and doesn’t believe the deal will close until 2017, “if at all.”
The Justice Department left little room for hope, saying it did not see a way forward to negotiate settlements allowing the mergers to go forward, even if insurers divested assets. The department is particularly concerned over lack of consumer choice, as many areas of the country would be left with just one or two insurers to choose from if the transactions are completed.
Consumer advocacy and medical groups greeted the news warmly Tuesday, saying the mergers would have harmed patient interests.
“Allowing commercial health insurers to become too big and exert control over the delivery of healthcare would be bad for patients and the vitality of the nation’s healthcare system,” said AMA President Andrew Gurman. “With existing competition in health insurance markets already at alarmingly low levels, federal officials have a strong obligation to enforce antitrust laws that prohibit harmful mergers and foster a more competitive marketplace that will operate in the patients’ best interests.”
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