Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Finance
December 12, 2015 12:00 AM

States hold key role in big insurer mergers

Lisa Schencker
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Rich Robleto, deputy commissioner of the Florida Office of Insurance Regulation, presides over the state public hearing on the Aetna-Humana merger.

    The U.S. Justice Department's antitrust probe of two massive proposed insurance mergers has dominated the spotlight as hospitals, doctors and lawmakers fret over the impact of allowing Anthem to absorb Cigna Corp. and Aetna to swallow Humana.

    But insurance regulators in most states also have a shot at derailing or modifying the deals and will spend the first half of 2016 crunching data and holding public hearings.

    The insurers won't be able to merge in states that turn down the proposals. That means rejections from even a few of the most-populous states could break the deals by diluting their financial feasibility.

    “A handful of commissioners really could stop it nationwide,” said John Oxendine, a former Georgia insurance commissioner.

    Peter Pavarini, immediate past president of the American Health Lawyers Association, agreed that scenario “could be a showstopper.”

    Aetna has said it is confident its proposal “will receive a fair, thorough and fact-based review from the Department of Justice and the states.” So far, Michigan, Utah and Vermont have approved it.

    Anthem said in a statement that it's having “collaborative and productive conversations” with state leaders.

    The Justice Department's analysis will focus mainly on the mergers' effects on competition. But state laws call on insurance commissioners also to assess whether the mergers would hurt policy holders or the public, said Jay Angoff, a former Missouri insurance commissioner and New Jersey deputy insurance commissioner.

    It's a broad standard that gives state insurance commissioners wider authority than the federal antitrust enforcers. They can set conditions such as freezing or limiting premium increases for set periods of time.

    Also, state insurance commissioners, unlike the Justice Department, must hold public hearings. “They have a process that's transparent, and I think that transparency really helps protect consumers,” said David Balto, an antitrust attorney and former policy director of the Bureau of Competition at the Federal Trade Commission. Balto recently helped launch a group that's fighting the mergers.

    MH Takeaways

    If state insurance commissioners injust a few of the most-populous states reject the Anthem-Cigna and Aetna-Humana mega-mergers, they could break the deals.

    Most of the states affected by the deals have not yet held their public hearings, but will likely do so in coming months, said Ana Gupte, senior analyst for healthcare services with Leerink Partners.

    Florida held its hearings last week. Its approval is particularly important to the Aetna-Humana merger because of Humana's concentration in Medicare Advantage plans and the state's large number of senior citizens.

    Insurance company representatives, an economist and lawyers took turns at the microphone as Florida officials peppered them with questions about how the mergers would affect technology, provider networks and companies' finances. None of the few who offered public comments at the hearings argued explicitly against the deals.

    Gupte said she thinks Florida will approve both mergers but will require divestitures in the Aetna-Humana deal. Florida's blessing would be “a leading indicator” of how the Justice Department and other states might view the Aetna-Humana merger, she said. Gupte pegs the chances of the Aetna-Humana merger closing at about 75% and the Anthem-Cigna merger at 60%.

    The insurers have been lobbying state commissioners hard in recent months, Oxendine said. Insurers can be especially influential in the states where they are based, Angoff said. Humana is headquartered in Kentucky, Anthem in Indiana, and both Aetna and Cigna are headquartered in Connecticut.

    States' political affiliations might also affect the merger decisions. Democratic states might be more inclined to give insurers a tough time, whereas Republican states might be less willing to go against corporations, Oxendine said.

    It's also possible that state insurance commissioners will approve the deals, but with conditions. In his time as insurance commissioner, Angoff said he ordered limitations on rate increases.

    He cautioned, however, that a state's previous approach to a merger doesn't necessarily indicate how it will act now. “There is no precedent among insurance commissioners for deals that are this big, that affect this many states,” Angoff said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    HCA Healthcare sign
    HCA moves forward on capital projects, outpatient expansion despite tough year ahead
    clinicaltrial.JPG
    Venture capital firms launch clinical trial tech company with $203M in funding
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Finance Newsletter: Sign up to receive daily news and data that has a direct impact on the business and financing of healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing