We use cookies to improve your experience and optimize user-friendliness. Read our cookie policy for more information on the cookies we use and how to delete or block them. To continue browsing our site, please click accept.

Health Insurance Company Mergers Under Scrutiny

Health Insurance Company Mergers Under Scrutiny

Receive-EmailAbout our Insurance Services

Last summer, over $80 billion of proposed health insurance mergers were announced as Aetna planned to join forces with Humana and Anthem planned to join forces with Cigna. We mentioned at the time that the deals would undergo significant regulatory scrutiny which could delay their approval and require significant alterations to their structure. And the DOJ did not disappoint.

Attorney General Loretta Lynch announced recently that the government was filing suit to block both mergers, expressing concern that the consolidation would leave too much of the industry’s power in the hands of too few companies. And with that came renewed concerns that the consumer could suffer at the hands of the merged entities in the form of stifled competition leading to higher prices and lower quality of care.

The companies have strong incentives to fight the suits as both merger agreements contain breakup fees of at least $1 billion.

With the DOJ specifically commenting on their belief that these mergers can’t be solved through divestitures, it will likely come down to a court battle. Once again, stay tuned.

Shawn Gillon Shawn Gillon, CPA
T (732) 828 1614
sgillon@withum.com

linkedin

Ask Our Experts

The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals.

Previous Post
Next Post
X

Insights

Get news updates and event information from Withum

Subscribe