Merger Between Anthem and Cigna Blocked by Federal Judge

U.S. District Judge Amy Berman Jackson of the Federal District Court for the District of Columbia blocked a proposed $48 billion merger between Anthem Inc. and Cigna Corp. The block came two weeks after the proposed merger between Aetna and Humana was blocked on antitrust grounds.

The judge decided that the proposed merger would be ‘harmful’ to customers and violated federal antitrust law becuase it of its ‘anticompetitive effects.’

In the beginning, the two companies said the merger would create a more ‘diversified’ health insurer, though there was eventually a disagreement that Judge Jackson called ‘the elephant in the courtroom.’

A press release from Anthem states that the company ‘intends to file a notice of appeal and request an expedited hearing of its appeal to reverse the Court’s decision so that Anthem may move forward with the merger…’

 

References:

Federal Judge Blocks Anthem’s Planned Acquisition of Cigna

Judge, Citing Harm to Customers, Blocks $48 Billion Anthem-Cigna Merger

Anthem Responds to U.S. District Court’s Decision on Acquisition of Cigna

Aetna Plans to Stay Out of Individual Market in 2018 Following 2016 Losses

Mark Bertolini, chairman of Aetna Inc., stated that the company would not be involved in the individual market throughout 2018 because of the uncertainty of legislative changes. The company hopes to return to the market in 2019 when there is expected to be a new system in place.

Executives from the company said that involvement in the individual market in 2016 led to a $450 million loss, which was much higher than the company anticipated. An antitrust judge suggested that the company may be using concerns in the individual market to leverage its proposed acquisition of Humana, Inc. According to Bertolini, Aetna is still reviewing the antitrust case ruling and may file an appeal.

For more information, click here.

Aetna’s Proposed Merger with Humana Prompts Concerns of Reducing Competition in the Marketplace

U.S. District Judge John Bates intercepted Aetna’s proposed acquisition of Humana, a deal the judge declared was “presumptively unlawful” in the private marketplace. The proposed $37 billion acquisition, which was focused on Medicare Advantage plans, a market in which Humana is particularly strong, was blocked because it was thought that it would lessen competition for Medicare Advantage plans in the marketplace. The judge declared the merger would not be in the best interest of the companies’ consumers, especially in other markets where the merger would have a large share of business.

Judge Bates commented, “The court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anticompetitive effects for consumers in the challenged markets.”

This interception came just 6 months after a proposed merger between Anthem and Cigna was blocked by the Justice Department.


This is a developing story. Stay tuned for more information regarding the Aetna-Humana merger proposal.

Resources

Judge Blocks Aetna’s $37 Billion Deal for Humana, The New York Times

Judge Cites ‘Serious Concerns,’ Blocks Aetna’s $37B Merger with Humana, BenefitsPro

Reminder from Anthem – Modification to Medicare Advantage Commission Payment Schedule

A reminder that Anthem is modifying their Medicare Advantage/Prescription Drug Plan (MAPD) and Prescription Drug Plan (PDP) commission payment schedule so that payments are made in the effective month of the policy.

As a result, there will be two commission payments made in December for MAPD and PDP policies.  One will be with a statement date of November 30, 2016, and the other will be with a statement date of December 18, 2106.  Brokers will be paid on MAPD and PDP commissions during the first week of December for November policy effective and due dates (based on the current schedule).  There will also be a second MAPD and PDP commission payment after December 18, 2016, for December policy effective and due dates.  December 2016 is the only month brokers will receive two commission payments.  The monthly schedule will resume with commission payments in the effective month of the policy for MAPD and PDP policies in January.

 

Reference:  Dec 2016/2017 Commission Payment Schedule.

Questions:  commissions@crnstone.com