It has been a year since insurers, Anthem and Aetna, announced their plans to merge with Cigna and Humana, respectively. However, the merger plans are not yet approved by the Department of Justice (DOJ), which if passed, cut the count of five largest health plans of the country to three, namely Anthem, Aetna, and UnitedHealth. Nevertheless, the merger deals have faced heavy scrutiny from the Congress, state regulators, and the Department of Justice.
Reports say that there are signs for the Aetna-Humana merger to be approved soon, but the Anthem-Cigna merger still faces strong repulse from the Federal and state regulators. A series of meetings between the executives of Anthem and Cigna with the state attorney general and DOJ representatives were conducted last month. After the meetings, regulators said that they doubt about the chances of the merger being approved, as it will have negative effects on the competitors. The merger plans were particularly criticized by the California Department of Insurance, stating that the deal will have anti-competitive effects.
After the public hearing of the Congress and the DOJ meetings, many of the anti-trust regulators said that Cigna and Anthem would not be able to offer the necessary fixes to satisfy the Department of Justice regulations. Statistics tells that if the Anthem-Cigna merger is approved, it will become the biggest health plan in the country, and will have more than 54 million lives covered.
The Aetna-Humana merger is going smoothly either. Nevertheless, as per the opinion and reactions of the regulators, this merger has a greater chance of approval than the other one. In the individual state approval process of the merger, Missouri put forward conditions that Aetna had to follow for the state to approve the merger. The state of Missouri also expressed concerns that after the merger, Aetna-Humana will have much control on Medicare Advantage market of the state.
The State of California put forward negotiations in which the merger offers California Department of Managed Health Care (DMHC) scrutiny over increases in health premium. It is true that the idea of Aetna to acquire Humana comes from its success in Medicare Advantage field.