HARTFORD, Conn. (WTNH) — The Department of Justice stepped in to block some mega insurance mergers that would have a huge impact right here in Connecticut, involving Hartford-based Aetna and another that involves Bloomfield-based Cigna.
These mergers could not only affect the cost for health insurance for tens-of-millions of Americans. It could also jeopardize lots of jobs here in Connecticut — where Hartford was once known as the insurance capital of the world.
“The Department of Justice is suing to block both Aetna’s acquisition of Humana and Anthem’s acquisition of Cigna,” said United States Attorney General Loretta Lynch, at a press conference Thursday.
With those words, two deals worth tens-of-billions are effectively on hold. The Justice Department sued to block Anthem‘s $48 billion takeover of Bloomfield-based Cigna. And filed a separate lawsuit blocking Hartford-based Aetna’s $37 billion merger with Humana.
“They would leave much of the multi-trillion dollar industry in the hands of just three mammoth insurance companies,” Lynch said.
DOJ argues the deals would kill competition in the health insurance industry by reducing the number of large nationwide insurers from five, down to three. State politicians — both Republicans and Democrats — seem to agree that the deal could spell bad news for Connecticut. Those concerns are also felt by our U.S. Congressmen, saying the mergers would kill jobs and raise prices for health insurance.
“They may have been good for the bottom line of these companies,” said Sen. Richard Blumenthal (D-Conn.), “but not for our economy, jobs, quality of healthcare and competition which provides consumers with more choices.”
Aetna vows to fight the lawsuit. pledging in a statement to “vigorously defend the companies’ pending merger… (and that) A combined company is in the best interest of consumers, particularly seniors seeking affordable, high quality Medicare Advantage plans.”
Cigna sent out a more passive statement that read in part; “In light of the DOJ’s decision, we do not believe the transaction will close in 2016 and the earliest it could close is 2017, if at all.”
The thinking is that since hospitals all over the country are starting to merge and grow larger, healthcare providers are trying to increase their bargaining leverage by getting bigger also. But for now these two deals are on hold.