A unique facet of the merger process in health insurance is that the state’s insurance commissioner must approve all insurance mergers. While the laws empowering the insurance commissioners vary state-to-state, most states use a slight variation on the Model Insurance Holding Company System Regulatory Act. Much like the federal antitrust laws, the Model Insurance Act authorizes the state’s insurance commissioner to stop a merger when it would “substantially lessen competition” or “tend to create a monopoly.” But, the Model Insurance Act further enables a merger to be challenged if there is a “significant trend towards increased concentration” in the insurance market. This allows insurance commissioners far wider latitude to challenge insurance mergers than the Department of Justice Antitrust Division (DOJ) or the state’s attorney general.
The review process established by the insurance commissioner’s office is also more publicly accessible than the DOJ or state’s attorney general’s review. First, the review process is generally public. The parties must file their intent to merge and all documentation is available for public consumption. Second, along with collecting data and information from the parties, the insurance commissioners will also hold public hearings. These hearings allow antitrust experts and concerned parties to voice concerns. Finally, in the event a commissioner deems a merger problematic, the commissioner can utilize unique remedial measures to ensure insurance markets remain competitive. While the DOJ and states’ attorneys general often rely on divestitures, insurance commissioners can seek other remedies such as forcing the parties to fund a state's health care programs or not increase premiums.
In the case of Anthem/Cigna and Aetna/Humana, the insurance commissioners are highly engaged and skeptical. Currently, there are 26 insurance commissioners reviewing the transactions. Public hearings in a large number of states will likely occur in 2016. The process is ongoing with no set timeline.
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