Missouri Decision Should Serve As Model for Other States
We have previously applauded the recent Missouri decision that rightly denied the proposed Aetna-Humana merger. This decision should be a model for other states, not just based on the outcome, but also based on how well the decision was written. Justice Louis Brandeis said: “Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” This especially applies to governmental processes. The whole point of having an open and transparent process
Missouri Denies Merger of Aetna and Humana in Excellent First Step For Consumers
Missouri is the “Show Me state” and when it comes to Aetna Humana merger the parties simply can’t show that consumers won’t lose from the Aetna Humana merger. Yesterday, the Missouri Department of Insurance, Financial Institutions and Professional Registration released a landmark decision denying the merger of Aetna and Humana. Missouri is the first state to reach such a decision in order to protect local consumers. With many states insurance commissioners, state attorneys ge
Missouri Should Block the Aetna Humana Merger
Last week, the Missouri Department of Insurance held a hearing on the proposed merger of Aetna and Humana. The hearing was not widely noticed, but it could not be more timely or important – the proposed merger threatens to raise premiums of over 300,000 older Missourians who depend on Medicare Advantage. History demonstrates a simple and compelling truth – when insurers merge premiums go up. Faced with this daunting truth, the merging companies presented the best economists m
Too Big to Fix: Divestitures and the Aetna-Humana Merger
The Department of Justice has traditionally conditioned its approval of large mergers based on divestitures. However, recent studies are demonstrating that divestitures are not always successful remedies, particularly concerning mergers in the health insurance arena. Last week the Capitol Forum released a new study examining the proposed mega $37 billion Aetna-Humana merger and why a negotiated settlement with the Department of Justice (DOJ) faces a number of obstacles and lo
Rising Premiums Will Not Be Reduced By Health Insurance Mergers
Since 2000, workers’ contributions to premiums have greatly outpaced wage growth, leading to consumers struggling to pay their premiums and in many cases put off receiving healthcare due to increased costs. One of the arguments that Anthem, Cigna, Aetna, and Humana have made when arguing for their proposed mergers is that the acquisitions will benefit consumers by leading to greater efficiencies and ultimately lower costs. This claim is misleading and inaccurate: there is sub
The Best Bad Advice Money Can Buy
The health insurance companies Anthem, Cigna, Aetna, and Humana have collectively spent over $400 million on huge numbers of lawyers, investment bankers, and other advisors in order to get two health insurance mergers approved. It’s no wonder these companies are investing so much; the merger of Aetna and Humana will cost $37 billion and the merger of Anthem and Cigna will cost $53 billion. And should the federal or state governments block the mergers, the companies would have
Cigna Says Acquisition By Anthem May Not Occur Until 2017
In a regulatory filing before the Securities and Exchange Commission, Cigna stated that its acquisition by Anthem may not be approved this year, and that it might be pushed back to 2017. Cigna’s Chief Financial Officer Tom McCarthy told an investors’ conference that the merger has been delayed because “of the depth and complexity of the regulatory process” and that Cigna “probably did underestimate” how extensive the antitrust investigation would be. Nevertheless, he said the
Antitrust Regulators Scrutinize Health Insurers After Blocking Halliburton-Baker Hughes Deal
The Department of Justice is turning its attention to the health insurance mergers of Anthem and Cigna and Aetna and Humana after its legal challenge caused Halliburton Co. and Baker Hughes Inc. to end a proposed $28 billion acquisition. DOJ’s increasing willingness to take companies to court indicates that these acquisitions will be carefully scrutinized. William Baer, who has just been promoted to the number three position at the DOJ, is taking his job to protect competitio
Anthem Blue Cross Fined By California For Failing To Address Consumer Grievances
The California Department of Managed Health Care recently fined Anthem Blue Cross $415,000 for failing to quickly or completely answer consumer complaints. In a statement, the Department said it had uncovered 40 cases involving 83 violations, such as Anthem’s failing to addressing consumer complaints within 30 days or failing to provide state investigators with adequate information. This rebuke is especially significant, because it comes at a time when Anthem is attempting to
Panel Examines How Health Insurance Consolidation Will Affect Hospitals and Patients
A panel of experts at the American Hospital Association’s Annual Meeting examined the likely impact of the proposed health insurance mergers of Anthem-Cigna and Aetna-Humana. They concluded that the mergers will harm consumers, doctors, and hospitals, and recommended that interested parties work to block these acquisitions. The first speaker, Doug Ross, provided background information on the transactions. He stated that antitrust authorities should be asking themselves two qu
