Missouri calls Aetna-Humana merger anti-competitive for the state
por Lauren Dubinsky, Senior Reporter | May 26, 2016
Business Affairs
State's 'brave stand' lauded
by health care stakeholders
by health care stakeholders
In a blow to the proposed $37 billion Aetna and Humana merger, the Missouri Department of Insurance, under the leadership of director John M. Huff, ruled that it would be anti-competitive for the state.
The companies have 30 days to submit a plan to fix the anti-competitive impact or they will not be permitted to operate in 65 Missouri counties including St. Louis City and St. Louis County, according to a preliminary order issued by the State's insurance officials.
Several organizations applauded Missouri's stance on the merger. Dr. Steven J. Stack, president of the American Medical Association (AMA), stated that this "strongly validates" the concerns that AMA expressed to Missouri regulators.
The merger would have substantially compromised competition in the state's Medicare Advantage market, according to the AMA, particularly with negative consequences for elderly patients.
“We applaud Director Huff for looking out for consumers today,” Lhakpa Tsering, executive director of the Missouri Health Advocacy Alliance, told The Missouri Times. “With this ruling, the Department took a brave stand to make sure the Missouri insurance market remains competitive.”
The merger is currently being reviewed by the U.S. Department of Justice, state regulators and antitrust authorities, and they are also reviewing the Anthem and Cigna merger. Since the deals will reduce major health insurers to three from five, investors are unsure if they will close, according to Reuters.
But Aetna isn't expecting this order to affect the merger at the federal level.
“The Missouri order does not impede the DOJ approval process,” T.J. Crawford, senior director of media relations at Aetna, said in a statement. “We’re disappointed but expect to have a constructive dialogue with the state to address their concerns.”
Other states have taken a different view of the merger. The Connecticut Department of Insurance is among 15 states that have already approved it. A spokesperson from the department told the Hartford Courant that the merger wouldn't affect competition locally because Humana has almost no customers in the state.
However, the Anthem and Cigna merger is still under review in Connecticut. The department will evaluate the competitive impact and the impact to Cigna after it's combined into Anthem.
The companies have 30 days to submit a plan to fix the anti-competitive impact or they will not be permitted to operate in 65 Missouri counties including St. Louis City and St. Louis County, according to a preliminary order issued by the State's insurance officials.
Several organizations applauded Missouri's stance on the merger. Dr. Steven J. Stack, president of the American Medical Association (AMA), stated that this "strongly validates" the concerns that AMA expressed to Missouri regulators.
The merger would have substantially compromised competition in the state's Medicare Advantage market, according to the AMA, particularly with negative consequences for elderly patients.
“We applaud Director Huff for looking out for consumers today,” Lhakpa Tsering, executive director of the Missouri Health Advocacy Alliance, told The Missouri Times. “With this ruling, the Department took a brave stand to make sure the Missouri insurance market remains competitive.”
The merger is currently being reviewed by the U.S. Department of Justice, state regulators and antitrust authorities, and they are also reviewing the Anthem and Cigna merger. Since the deals will reduce major health insurers to three from five, investors are unsure if they will close, according to Reuters.
But Aetna isn't expecting this order to affect the merger at the federal level.
“The Missouri order does not impede the DOJ approval process,” T.J. Crawford, senior director of media relations at Aetna, said in a statement. “We’re disappointed but expect to have a constructive dialogue with the state to address their concerns.”
Other states have taken a different view of the merger. The Connecticut Department of Insurance is among 15 states that have already approved it. A spokesperson from the department told the Hartford Courant that the merger wouldn't affect competition locally because Humana has almost no customers in the state.
However, the Anthem and Cigna merger is still under review in Connecticut. The department will evaluate the competitive impact and the impact to Cigna after it's combined into Anthem.
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