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U.S. Court of Appeals brief cites Commissioner Jones’ findings that Anthem Cigna merger anti-competitive

News: 2017 Press Release

For Release: March 21, 2017
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U.S. Court of Appeals brief cites Commissioner Jones’ findings that Anthem Cigna merger anti-competitive
American Medical Association files amicus brief challenging Anthem appeal to reverse decision to block merger

SACRAMENTO, CALIF. — The American Medical Association (AMA) and the Medical Society of the District of Columbia, in their appellate court brief, relied upon Insurance Commissioner Dave Jones' findings regarding the anti-competitive nature of the proposed Anthem Cigna merger. The amicus brief was filed last Friday in the U.S. Court of Appeals for the District of Columbia where Anthem is appealing to reverse the federal district court order blocking its merger with Cigna.

"This merger should not be reconsidered," said Insurance Commissioner Dave Jones. "Allowing two of the largest health insurers in the country to merge will increase the price of health insurance and decrease choice and the quality of health care for consumers and businesses. I continue to urge the federal courts to block the merger. Bigger is not better for California's consumers or the health insurance market."

Last year Commissioner Jones held an extensive public hearing where members of the public, Anthem and Cigna executives, consumer advocates, medical professionals, and anti-trust experts provided testimony regarding potential impacts of the proposed Anthem Cigna merger. After reviewing all the evidence, Jones concluded the Anthem Cigna merger was bad for consumers and businesses, and bad for health insurance and health care markets. Jones issued detailed findings of fact and law and urged the U.S. Department of Justice to block the merger because it is anti-competitive and would harm California consumers, businesses, and the California health insurance market. The Department of Justice sued to block the merger and the federal district court issued an order blocking the merger consistent with Jones' findings.

The Anthem and Cigna merger transaction, estimated to be worth more than $50 billion, would make Anthem the nation's largest health insurer, and result in increased concentration in an already consolidated health insurance market. Commissioner Jones found that if the merger moves forward, Anthem's market share would exceed 50 percent in 28 California counties and 40 percent in 38 counties, which will negatively impact California consumers with likely reductions in access, quality of care, and affordability of health insurance.

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Media Notes:

  • The proposed merger transaction was valued at $54.2 billion when it was announced in July of last year.
  • Cigna's 2015 total revenues were $34.9 billion nationwide.
  • Anthem's 2015 total revenue was $73.9 billion nationwide.
  • In California in 2014:
    • The four largest insurers, which includes Anthem, controlled 85 percent of the market.
    • Four insurers controlled 82 percent of the large group market statewide.
    • Four insurers controlled 88 percent of the small group market.
    • Four insurers controlled 93 percent of the individual market.
  • California's Health Benefit Exchange (Covered California), the four largest plans (including Anthem) controlled 95 percent of the individual market in 2014 and 91 percent of that market in 2015.
  • California law provides that the commissioner does not have direct approval authority over the Anthem and Cigna merger unless the company being acquired is domiciled in California. Cigna is domiciled in Connecticut.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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