US: Anthem and Cigna set for court fight to save $48 billion merger

Anthem proposed merger with Cigna would reduce health-care competition and raise costs for consumers, US antitrust lawyers will argue Monday when the government goes to court to block the transaction.

Their $48 billion merger – the biggest in the history of the American health-insurance industry – would likely give the enlarged company the power to raise prices for insurance, cut payments to doctors and reduce the quality of service, the Justice Department has said in court papers.

Anthem counters that by buying Cigna it would be able to lower reimbursement rates to health care providers. Those savings would be passed on to employers and policyholders, the Indianapolis-based company says.

The Justice Department’s lawsuit opposing the Anthem-Cigna merger is one of two health-care antitrust cases going to trial in the waning days of the Obama administration as it tries to prevent that industry from shrinking to three national carriers from five. The second case, against the $38 billion tie-up of Aetna and Humana, opens before another judge in Washington on Dec. 5.

By challenging the deals earlier this year, President Barack Obama’s administration seized an opportunity to further shape the future of health care after passage of the Affordable Care Act.

Full Content: Bloomberg

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