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Why antitrust regulators remain skeptical about the Anthem-Cigna merger & how this may impact the $48B deal: 6 key notes

Many U.S. antitrust regulators are concerned Anthem's $48 billion acquisition of Cigna will fail to maintain competition in the insurance industry, according to Wall Street Journal.

Here are six key notes:

1. On June 10, Anthem and Cigna representatives discussed the merger with various Justice Department staff members and state attorney general representatives. During the meeting, officials voiced their concerns over the merger. While merging companies can often obtain government approval through offering to sell assets or comply with other merger restrictions, government officials said they had doubts Anthem and Cigna could provide satisfactory fixes.

2. However, hope is not lost as the companies have other scheduled meetings this week with Justice Department officials. Also, various sources have said the Justice Department has not solidified a decision on whether to block the merger.

3. A source familiar with the merger said the companies project to hear a decision concerning the department's approval by mid-July, slightly later than the companies projected in May. Pending approval, the merger would create the largest health insurer in the nation, with membership totaling 54 million and revenue reaching $117 billion.

4. Anthem has contended the insurer very minimally overlaps with Cigna on products and geography, and therefore would reduce costs for consumers. However, Anthem and Cigna have competed in the insurer marketplace when administering health benefits for various U.S. companies. Justice Department officials are concerned the merger will reduce the number of competitors in the national employer market from four to three.

5. Additionally, officials are concerned how the merger will impact individual insurance plans, with Anthem participating in 14 state Affordable Care Act exchanges, and Cigna predicating in seven state exchanges this year. Cigna has also said it intends to expand into new states next year.

6. Many health systems and physician groups have starkly opposed the merger, claiming it will give insurers more power which will ultimately drive down reimbursement.

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