DOJ Acts to Halt Proposed Health Insurer Mega-Mergers

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The Department of Justice sues to stop two deals so large it says they will harm U.S. consumers by leading to increased care costs.

The U.S. Department of Justice is suing to block two proposed mergers that would reduce the number of large, national health insurance companies in America from five to three.

The lawsuits, which were filed in the U.S. District Court for the District of Columbia on Thursday, aim to stop Anthem’s $48 billion takeover of Cigna and Aetna’s $37 billion bid for Humana. The DOJ says the proposed mergers would reduce competition in the insurance industry, leading to increased health care costs for consumers.

“Competitive insurance markets are essential to providing Americans the affordable and high-quality health care they deserve,” Attorney General Loretta E. Lynch said in a statement. “These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies. Our actions seek to preserve competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better health care for all Americans.”

Both the American Medical Association and the American Hospital Association shared similar concerns over the proposed mergers last year.

If the two mergers were allowed to proceed, Anthem would ultimately end up as the insurer for 53 million Americans and Aetna would insure 33 million consumers.

Eleven states and the District of Columbia joined the lawsuit challenging Louisville-based Anthem’s acquisition of Cigna. Eight states and the District of Columbia joined the DOJ’s suit against Hartford, Connecticut-based Aetna and its proposed takeover of Humana.

Although the insurance companies maintain that the mergers will allow them to increase health care efficiency, leading to cost savings for consumers, the DOJ isn’t buying it.

Assistant Attorney General William Baer said the proposed insurer takeovers would hit consumers where it hurts — in the pocketbook.

“We all, including seniors, everyday workers and the previously uninsured and underinsured, deserve affordable health insurance options,” Baer said. “Competition today drives these four successful firms to fight to give us affordable options. There is no reason to put that dynamic at risk.”

Baer added that the proposed mergers are nothing more than a “convenient shortcut to increase profit” for Anthem and Aetna.

Both Anthem and Aetna said they plan to fight the DOJ lawsuits. Anthem called the suits an “unfortunate and misguided step backwards for access to affordable health care for America,” CNN Money reported.

A federal judge will ultimately decide whether the proposed mergers are anti-competitive.

What do you think of the federal government’s attempt to block the two separate health insurance company mergers? Sound off below or on our Facebook page.

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