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US: Anthem’s Cigna takeover could draw $3bn Blue Cross penalty

By  |  November 30, 2016

Anthem could face a penalty of about $3 billion from the national Blue Cross Blue Shield Association if it fails to derive the bulk of its nationwide revenue from Blue-branded products after acquiring Cigna, according to testimony from an Anthem executive during a US antitrust trial in Washington.

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    Twenty-three percent of Cigna’s domestic revenue would need to be rebranded to comply with rules of the BCBS association, said Steve Schlegel, Anthem’s vice president for corporate development, under questioning Wednesday by a Justice Department lawyer.

    The US is challenging Anthem’s $48 billion takeover of Cigna, saying it will reduce competition in the national market for insurance plans sold to large companies and lead to higher prices.

    Anthem has taken the position that it will keep Cigna as a stand-alone entity to compete with other BCBS Association members outside of Anthem’s exclusive territories.

    Full Content: Bloomberg

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