Department of Justice files Lawsuit to Stop Mergers

UPDATE 7/21/2016:

The DOJ held their press conference announcing their suits to block both mergers at 11:00. Here are a few takeaways:

·         DOJ believes that the mergers would fundamentally reshape the healthcare market and drastically restrict competition          at the expense of consumers, employers and healthcare providers.

·         All four insurers are thriving as independent firms; the mergers are not a mechanism for their survival

·         Mergers represent a convenient pathway to increase profits.

·         Anthem/Cigna: biggest threat is to the employer healthcare market.

·         Aetna/Humana: biggest threat is to the MA market.

·         The DOJ considers these potential mergers a huge threat in derailing innovation in healthcare; blocking the transformation to value based care. Cigna and Humana both represent a significant commitment to innovative models and these mergers are a way for the buyers, Anthem and Aetna, to squash innovation.

·         Insurers have shown zero regard for how exacting cost concessions from healthcare providers affect quality of care for beneficiaries.

·         The DOJ suits will be considered in tandem; not individually by one judge.

·         DOJ does not believe that there are any divestiture options that would salve the antitrust concerns.  Offers have been made but they do not represent any meaningful attempt to eliminate existing antitrust concerns.

If you have any questions regarding these developments, please contact us.  Thank you!

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