Virginia Bureau of Insurance Issues Report Recommending Against Anthem-Cigna Merger
On Wednesday, July 27th, the Virginia Bureau of Insurance issued a 97-page report recommending that the Anthem-Cigna merger not be approved. The Virginia State Corporation Commission, which is responsible for disapproving or approving the merger, will take this report into consideration and make its decision soon.
The Bureau analyzed the merger and determined that it will significantly impact competition at the state and local level for the large group health insurance market. In this market, the merger is a violation under the NAIC (National Association of Insurance Commissioner) standards. It will result in a lessening of competition in several areas, and a substantial reduction of competition and increase in Anthem’s market power in central Virginia. The report includes a lengthy analysis of the merger by economist Glen Watkins, and states that significant concessions or remedies would be required to protect consumers from the potential harm caused by this deal.
The report also recommends that Anthem be given thirty days to respond to these findings before the SCC suspends its license. It will make it harder for the mergers to proceed, and shows that states can still play a significant role in the merger review process.