State Attorneys General Join Probe of Health Insurance Mergers

January 21, 2016

Fifteen state attorneys general have joined a Justice Department probe of the Anthem-Cigna and Aetna-Humana mergers. The states that have joined the investigation include Connecticut, Florida, Iowa, Massachusetts, and Tennessee, each of which has an active antitrust office. The heightened scrutiny of these mergers is further evidence that the antitrust review of the two mergers will be tough and prolonged.

 

As part of these investigations, the state attorneys general will provide data to the DOJ on how the mergers will affect their jurisdictions, conduct joint calls to gather data from the companies, and hear from critics and supporters of the deals. Since each state regulates its own individual market, the pending health insurance consolidation will have a disproportionate impact in certain states. For this reason, state attorneys general are concerned about the mergers and are seeking to assist the DOJ, as well as conduct their own investigations.

 

The proposed mergers have already received criticism from many different quarters, including Democratic presidential candidate Hillary Clinton, the American Antitrust Institute, and numerous consumer groups and unions. Critics state that the mergers will likely harm consumers by leading to higher insurance premiums and limited access to health care providers. Others express concern about reduced competition in the health insurance markets and less innovation.

 

Last year Comcast attempted to acquire Time Warner Cable for $45 billion. Over two dozen state attorneys general joined a federal antitrust review of the case. After intense scrutiny, regulatory opposition, and complaints that the deal would stifle competition and harm customers, Comcast abandoned the merger.

 

The current health insurance mergers are quite similar. The Aetna-Humana and Anthem-Cigna mergers, like the Comcast deal, will eliminate major competitors in insurance markets, harm consumers, and lead to reduced consumer choice and innovation. Many individuals and organizations have mobilized in opposition to these deals as well. The question is whether the Justice Department and state attorneys general will pursue a similar course of action and oppose the merger.

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