- UPDATE: Anthem has secured a restraining order against Cigna preventing the final dissolusion of the merger. The temporary order will be reviewed during a Delaware Chancery Court hearing on April 10.
After a court ruling ended the potential Cigna-Anthem merger, Cigna filed a $13 billion lawsuit in damages against Anthem for breaching merger agreements and causing the company to lose value for its shareholders.
“Cigna is disappointed in the outcome of this process,” the company stated in a press release.
“Cigna believed from the outset that the merger of the two companies had the potential to expand choice, improve affordability and quality and further accelerate value-based care. Anthem contracted for and assumed full responsibility to lead the federal and state regulatory approval process, as well as the litigation strategy, under the merger agreement. Cigna fulfilled all of its contractual obligations and fully cooperated with Anthem throughout the approval process.”
The US District Court ruled to block the merger because it would decrease competition and lessen choice for consumers. The court also found that the damage to health insurance markets wouldn’t have been offset by potential gains in efficiency.
Large health insurance mergers have been under scrutiny over the past months from several lawmakers and healthcare leaders. Lawmakers saw these activities as potential monopolies that would significantly violated antitrust legislation, and sent numerous letters and requests to the Department of Justice to deny the payers permission to continue.
“Highly concentrated markets rarely benefit consumers, and we believe that merging four of the five largest national health insurers will likely increase premium and health care costs to consumers and businesses, diminish competition and choice, and decrease access to quality health care,” said a group of senators in one of the letters.
These “mega-mergers” of large health insurance companies presented themselves as a chance to improve healthcare quality and consumer prices, but the DoJ found that these insurance companies were already profitable enough and that the mergers were excessive.
“These mergers would fundamentally reshape the health insurance industry. They would leave the top five health insurers in just three mammoth companies,” said previous Attorney General Loretta Lynch.
“Competition would be substantially reduced for hundreds of thousands of families. These mergers may indeed increase the profits of Aetna and Anthem but they would do so at the cost of families, employers, hospitals, and providers.