California's top insurance regulator has urged the U.S. Justice Department to kill the pending $53 billion transaction between health insurance titans Anthem and Cigna Corp. over concerns of higher prices and lower quality plans.
California Insurance Commissioner Dave Jones, a regulator known not to mince words, said Anthem has made “vague, speculative and impossible-to-verify assertions” related to the benefits of the deal.
“Anthem and Cigna failed to provide details to support their claim of $2 billion in savings, and they refused to guarantee consumers and businesses will see the benefit of any potential savings in reduced prices,” Jones said in a statement. “More competition in California's consolidated health insurance markets is needed, not less.”
In a 22-page letter to top Justice Department leaders, Jones said the “most extreme” example of where Anthem's deal would lessen competition is the self-insured employer market. Anthem and Cigna control a combined 61% of that market. Many large, self-insured companies have expressed similar concerns over Anthem's acquisition.
Anthem said in a statement that it disagreed with Jones' analysis and that California's Department of Managed Health Care holds oversight of the transaction.
“We do not believe that the California Department of Insurance's opinion is based on the true merits of this transaction,” Anthem's statement read.
