How are mergers stopped or approved?

The Department of Justice Antitrust Division, States’ Attorneys General, and State Insurance Commissioners all have the same obligation to consumers – to make sure a proposed merger does not substantially reduce competition. To fulfill this mandate they have broad investigatory and remedial powers. At the end of the day, consumers must be fully protected from competitive harm – higher premiums, worse service, or less innovation.

The merger review and investigation process is often a lengthy and time-consuming affair. This is particularly true for the mergers of Anthem and Cigna and Aetna and Humana. Given the size of the transactions and overlapping markets, the parties will undergo a significant merger review process across three separate federal and state agencies. By the parties’ own account, the merger review will take over a year, wrapping up in the second half of 2016. Most importantly, to consummate the mergers, the insurers must pass each regulator/enforcer’s review process. Given the problematic nature of these mergers, that will not be an easy task.

In order for these two mergers succeed, the parties will have to undergo scrutiny at three separate levels from dozens of agencies. Each review process offers concerned parties the ability to raise competitive concerns and engage in the review process. It is critical that concerned parties participate at every available turn.

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