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Connecticut, Georgia Insurance Commissioners Halt Reviews of Health Insurance Mergers

The Georgia Office of Insurance and Safety Fire Commissioner and the Connecticut Department of Insurance halted their review of the health insurance mergers after the Department of Justice filed suit to block both mergers over anticompetitive concerns. In two complaints, DOJ declared that the mergers would reduce competition, raise premiums for consumers, and stifle innovation by reducing the number of large national insurers from five to three.

Georgia insurance officials were planning to hold a hearing on the Aetna-Humana merger on July 26th, 2016, but now stated that hearing was cancelled, and they would wait to reschedule it until DOJ’s case is resolved. Additionally a hearing on the Anthem-Cigna merger had not yet been scheduled and that would also wait until the inquiry was concluded.

Currently Georgia’s health insurance markets for individual, small group, large group, and Medicare Advantage plans are already highly concentrated, with the top four insurers controlling over 75% of the market. In DOJ’s complaint against Aetna-Humana, Aetna’s head of Medicare Advantage described Humana as Aetna’s “most formidable competitor,” stating that “we compete with them everywhere and they have momentum.” The executives of both companies repeatedly discussed the intense competition between the two companies. Additionally, on the public exchanges, Aetna and Humana consider each other formidable competitors; in Atlanta, Aetna monitored and expressed concern about Humana’s pricing. If these mergers are allowed to proceed, health insurance markets would grow even more concentrated, and consumers would be harmed through higher premiums, less choice, and reduced quality of care. Georgia was one of eight states to join DOJ’s lawsuit against the Aetna-Humana merger and one of eleven states to join the lawsuit against the Anthem-Cigna merger.

Consumer advocacy group Georgians for a Healthy Future hailed DOJ’s decision as victory for consumers and competition. Their health policy analyst, Meredith Gonsahn, said that “the stakes for consumers are high, and today regulators acted to ensure that consumers are not left paying more for fewer options.”

In Connecticut, the State Insurance Department was planning to hold a hearing on the Anthem-Cigna merger. Insurance Commissioner Katharine Wade was engulfed in controversy about a possible conflict of interest and whether she should recuse herself from the merger review process. However, yesterday afternoon the Insurance Department announced that as a result of the federal antitrust lawsuit it has immediately suspended its review of Anthem’s proposed acquisition of Cigna.

While Anthem and Cigna issued conciliatory and separate statements, Aetna and Humana declared that they plan to vigorously defend their merger in court. Aetna CEO Mark Bertolini said he was willing to have a judge decide whether the merger should proceed, and “we’ll go all the way we need to make this happen.”

We will continue to monitor the merger in various states and at the federal level.

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