Government Seeks to Stop Massive Insurance Mergers

Last week, the U.S. Department of Justice along with the attorneys general from several states, including Illinois, filed suite to block two major mergers proposed this year: Anthem’s purchase of Cigna, and Aetna’s purchase of Humana. The DOJ bulletin states they determined the merger “would harm seniors, working families and indi- viduals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.”

The proposed mergers, if completed, would result in 3 rather than the current 5 large, national insurance com- panies. While the supporters of the mergers argued that the consolidation would decrease prices through greater economy of scale, the insurance industry is already marked by regional voids of competition, such as Blue Cross and Blue Shield in Illinois.