Aetna and Humana merger is a no-go: U.S. blocks acquisition

January 28, 2017

The U.S. Department of Justice recently blocked health insurance company Aetna Incs proposed $34 billion acquisition of the smaller insurer Humana Inc.

If you keep up with our blog (nudge: you should), you already know that both Aetna and United Healthcare pulled out of the ACA marketplace in North Carolina for 2017. So — why should you care about this garble of health insurance jargon? Because it’s setting a precedent.

Get this. Right now, Anthem Inc. is trying to close a $54 billion deal to acquire Cigna Corp. While Blue Cross Blue Shield North of Carolina is the only ACA insurer option in all 100 counties, there are five counties with an additional insurer option. The healthcare alternative for those living in Chatham, Johnston, Orange, Nash, and Wake is, you guessed it — Cigna.

But don’t jump out of your seat just yet. Officially, Anthem and Cigna’s merger potential sits in limbo for now. Unofficially, investors are pretty skeptical it will be approved by a judge and predict it won’t go through.

Translation: if you live in one of the five aforementioned North Carolina counties and you’re covered by Cigna, nothing is changing at this moment.

FYI: Aetna, Humana, Anthem, and Cigna have cited the ACA as the main catalyst for wanting to consolidate, but last July the U.S. Department of Justice filed a lawsuit to block Aetna’s acquisition of Humana and Anthem’s acquisition of Cigna, arguing that both deals would lead to higher premium prices. Attorney General Loretta Lynch, whose term ended on January 20th,  said that the mergers would restrict competition and “give tremendous power to large companies.” If these mergers happen, it would reduce the number of large national health insurers from five to three.

No matter who your health insurer is, you’re probably paying a pretty penny for healthcare. One reason insurance prices are so high? Mandates. We’re committed to fighting against state-based legislation that drives up the cost of healthcare for you and your family. Want to get in on the action? Join us.

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