Aetna-Humana's road to regulatory approval is proving much smoother than Anthem-Cigna's — Here's why

While neither the Aetna-Humana nor Anthem-Cigna mergers have received U.S. Justice Department antitrust approval, Aetna and Humana have more readily passed various regulatory and antitrust obstacles than its Anthem-Cigna counterpart, according to CT Mirror.

Yesterday, Shelley Rouillard, director of the California Department of Managed Health Care, granted Aetna approval for its $35 billion Humana acquisition. Per the approval agreement, Aetna will cap premium hikes in the small group market, and allow for more state oversights of the payer's rates. Additionally, Aetna will maintain various decision-making functions in California and will invest in several health initiatives.

On the other hand, California Insurance Commissioner Dave Jones advised the Justice Department to stop the Anthem-Cigna merger, as the deal would prove anti-competitive. The Aetna-Humana merger requires 20 states' approvals, and the merger is only awaiting approval from four more states. Comparatively, Anthem and Cigna require 29 states' approvals, and have only received 12 states' approvals.

Given both mergers will impact the healthcare insurance industry, why are the payers facing such different paths to approval?

While Aetna claimed its Humana purchase was primarily based on Humana's concentration in the Medicare Advantage market, which would compliment Aetna's other business lines, Missouri officials claimed the merger was anti-competitive for the state's Medicare market. Despite the concerns, an Aetna spokesperson claimed the state regulators did not reject the merger, but only issued a preliminary order which detailed their concerns. To alleviate such concerns, Humana and Aetna will likely divest some of their Medicare plans in the market, thereby limiting their dominating presence.

Additionally, New Hampshire regulators approved the Aetna-Humana merger in March after concluding the companies are not direct competitors in the state's Medicare Advantage market.

However, many officials worry Anthem and Cigna would control almost 50 percent of the U.S. self insured employer group market. Peter Kochenburger, deputy director of the University of Connecticut's Insurance Law Center, said to receive approval, all the payers need to strategically present their mergers and prove they are not anti-competitive.

More articles on coding & billing:
Federal investigators indict 5 individuals in $86M Medicare, Medicaid kickback scheme: 5 things to know
US healthcare spending to reach $21.1T: 4 notes
Why antitrust regulators remain skeptical about the Anthem-Cigna merger & how this may impact the $48B deal: 6 key notes

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