In a move that isn’t entirely a surprise, New Hampshire has joined 11 states and the federal government in a lawsuit opposing the $48 billion merger of health insurance giants Anthem and Cigna, saying it would harm competition.
“New competitors have found New Hampshire to be a difficult market to enter, and if the merger were to take place, it may take years for competition to return to its current level,” said New Hampshire attorney general Joe Foster in a prepared statement about the Anthem-Cigna lawsuit. “In the meantime, to the detriment of New Hampshire consumers, innovation in cost control and delivery of services is likely to suffer.”
The federal government is also suing to block a similar merger, a $37 billion deal between insurance giants Aetna and Humana, also because of concerns about competition. New Hampshire is not part of that lawsuit because the merger has no effect in this state.
The health insurance industry has five major companies in the U.S. If these two deals went through, that number would be reduced to three.
“These mergers would reshape the industry, eliminating two innovative competitors — Cigna and Humana — at a time when the industry is experimenting with new ways to lower health care costs,” the lawsuit filed by the U.S. Department of Justice states.
In a statement Thursday, Cigna said it was evaluating its options and did not expect the deal to close soon, “if at all.”
Anthem said in a statement that it is “fully committed” to challenging the lawsuit in court “but will remain receptive to any efforts to reach a settlement.”
Proponents of health-insurance mergers argue that they can actually people money, because they give insurance companies more bargaining clout when negotiating prices with hospitals and drug companies.
New Hampshire officials have long expressed alarm at the proposed Anthem-Cigna merger, especially after an analysis from the American Medical Association said the merger would affect New Hampshire more than any other state.
The AMA said combined company would control nearly two-thirds of New Hampshire’s health insurance market, a figure so high that it is potentially in violation of federal antitrust guidelines.
Earlier this month, the state Insurance Department said it was delaying public hearings about the merger because Anthem had submitted “incomplete” information.
State law says Insurance Commissioner Roger Sevigny must approve such mergers following an examination of company finances and the proposal’s effect on the competitive marketplace. Notably, the commissioner must decide whether the merger involves “substantial lessening of competition in insurance in the state or tendency to create a monopoly.”
