Justice Department Moves To Block 2 Health Insurance Mergers

Jul 21, 2016
Originally published on July 21, 2016 5:27 pm
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Two giant health insurance company mergers will be dissected in court. The Obama administration and a number of states filed lawsuits to block the mergers. NPR's John Ydstie reports.

JOHN YDSTIE, BYLINE: In one proposed deal, Aetna would buy Humana for $34 billion. In the other, Anthem would pay $48 billion for Cigna. The mergers were unveiled a year ago. Justice Department antitrust lawyers have been studying the implications ever since. If they were allowed to go ahead, it would reduce the number of large insurers in the U.S. from five to just three. U.S. Attorney General Loretta Lynch, who announced the government's move today, said that would be bad for consumers.

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LORETTA LYNCH: Now, if these mergers were to take place, the competition among these insurers that has pushed them to provide lower premiums, higher quality care and better benefits would be eliminated.

YDSTIE: Associate Attorney General Bill Baer said the four firms are already some of the largest, most sophisticated firms in the country, and they're thriving.

BILL BAER: They do not need these deals to survive, and consumers are entitled to benefit from their continued competition.

YDSTIE: But Aetna CEO Mark Bertolini told CNBC today that none of the four companies involved in the deals has more than an 11 percent market share nationwide, so the merged companies would not dominate the market.

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MARK BERTOLINI: The real competition's at the local market level where most markets are dominated by not-for-profit Blue Cross Blue Shield plans.

YDSTIE: In a combined statement, Aetna and Humana said they would vigorously defend their deal in the court. Anthem called the government suit misguided. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.