Federal Lawsuit Blocks Anthem-Cigna Merger, At Least For Now

Two giant mergers among the nation’s five largest health insurers, including Indianapolis-based Anthem, were put on hold Thursday by the U.S. Justice Department, which cited concerns about the so-called “Big Five” becoming the “Big Three.”

Anthem’s deal with Connecticut-based Cigna had been in the works for more than a year. However, in recent months experts started speculating about the feasibility of the $48 billion merger, reasoning the deal could potentially violate anti-trust laws. Those fears came to fruition Thursday when the Attorney General Loretta Lynch announced the DOJ was suing to block the Anthem’s acquisition of Cigna, another “Big 5” insurer.

The Justice Department is also blocking a similar merger between Aetna and Humana. Lynch said if both deals were allowed to move forward, competition would be drastically reduced, meaning premium prices could skyrocket and benefits could be cut.

Anthem, in a statement, says the DOJ’s analysis is based on misunderstandings of the healthcare industry and is “inconsistent” with the way the agency has reviewed healthcare transactions in the past. The company says it would be receptive to a settlement with the DOJ, but is prepared to fight the case in court.