Hospitals urged antitrust regulators this week to consider whether health insurer Anthem Inc.’s planned acquisition of rival Cigna Corp. would boost health care costs.
In a letter to the US Department of Justice, the hospital industry’s largest lobbying group said combining the No. 2 and No. 5 health insurers threatens to reduce competition in 817 geographic markets serving 45 million consumers.
In many of those markets, the American Hospital Association said, there are no strong competitors to buy assets that Anthem or Cigna might want to sell to pass muster with federal authorities. State insurance regulators will also look at the deal.
On July 24, Anthem announced plans to buy Cigna for $47 billion, the second major health insurer deal announced this summer. Aetna Inc. on July 3 inked an agreement with Humana Inc. The deals will reduce the number of national insurers to three from five.
Anthem and Cigna have said they expect the deal to pass antitrust scrutiny and that they have considered where asset sales might be needed.
The hospital association said in the letter dated Aug. 5 that it doubted Anthem and Cigna would find a suitable buyer for assets that provide insurance plans to millions of customers, also known as covered lives. Merging companies often will sell assets to a competitor if they believe it will help a larger deal pass regulatory scrutiny.
“In the 817 at-risk markets, over half the lives that need to be divested reside across 368 (metro regions) and rural counties with no divestiture possibility,” the group wrote.
Anthem and Cigna may need to divest from 2.9 million to 3.7 million covered lives in the commercial business to preserve competition in those markets, it said, and 1.7 million to 2 million of those are in markets with no potential acquirer. The analysis was based on the Herfindahl-Hirschman Index that measures market concentration.
Full content: The Fiscal Times
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Court Rejects T-Mobile’s Appeal Bid in Antitrust Case Over Sprint Merger
May 19, 2024 by
CPI
Google Requests Judge, Not Jury, to Decide on Antitrust Case
May 19, 2024 by
CPI
Apple Faces Contempt Hearings Over App Store Reforms
May 19, 2024 by
CPI
T-Mobile Faces Class-Action Lawsuit Over Sprint Merger After Appeal Denied
May 16, 2024 by
CPI
Google Faces Backlash Over Introduction of AI-Generated Summaries in Searches
May 16, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI