Insurers Battle Over Megamerger
Health insurance giant Anthem is pushing hard for a merger with rival Cigna, said Kevin McCoy in USA Today. The Indianapolisbased insurer has made four takeover offers for its slightly smaller competitor over the past month, the most recent a $47.5 billion bid, and Cigna has rejected all of them. Anthem executives have responded by taking the previously secret negotiations public, hoping to rally Cigna shareholders to their side. Whether this “latest jockeying” will lead to what would be the biggest U.S. health insurance merger ever remains to be seen. Among Cigna’s objections: antitrust lawsuits against Anthem and questions over who would head the combined firm.
Everyone wondered what Obamacare would do to the health insurance business, said Andrew Ross Sorkin in The New York Times. Now we know: “consolidation on a huge scale.” Just in the past few weeks, the nation’s five largest health insurers have been in a “round robin” of merger talks. In addition to Anthem’s bid for Cigna, UnitedHealth Group is courting Aetna, and Aetna and Cigna have each made overtures to Humana. With the Affordable Care Act effectively capping health insurers’ profits, companies are scrambling to achieve bigger scale “in hopes of generating higher margins.” Will consumers benefit? “The prevailing view is not promising.”
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