Virginia has helped successfully block the $54 billion proposed merger of Cigna and Anthem after a judge found that the merger would be anticompetitive and would uniquely harm the insurance market in Richmond.
According to the judge, the proposed merger would likely have caused higher premiums and out-of-pocket costs for working families in Virginia, as well as lower health plan quality, less innovation in the delivery of high-quality, cost-effective healthcare, and lower payments to doctors and healthcare providers.
“The judge in this case singled out Richmond in particular as likely to be uniquely harmed by this massive consolidation of the health insurance marketplace,” said Attorney General Herring. “It would have meant fewer choices and higher costs in the large group market which so many Virginians and Virginia businesses rely on for affordable, accessible healthcare. I’m proud of our successes in blocking a number of illegal and anti-competitive mergers, including the Aetna/Humana merger a few weeks ago. We will continue to closely examine any proposed mergers and vigorously oppose anti-competitive ones because these kinds of massive deals can have such a broad impact on Virginians.”
The merger would have allowed the consolidation of two major competitors in Virginia’s Large Group insurance market, which includes employers with more than 50 employees. An analysis showed that the proposed merger would have given the new company market share in excess of 60% of the market in many communities, including Richmond, Hampton Roads, the New River Valley, and Winchester. The consolidation of the Richmond market was featured prominently in expert testimony during trial, with the court finding that:
“…the evidence has shown that the proposed acquisition will have an anti-competitive effect on the sale of health insurance to large groups in at least one of those [local] markets: Richmond, Virginia.”
The Commonwealth was part of coalitions, which included multiple states and the U.S. Department of Justice, that filed separate suits in July to challenge the Anthem/Cigna merger and the Aetna/Humana merger following a year of review, analysis, and investigation. Both matters have been handled for Virginia by Senior Assistant Attorney General Sarah Oxenham Allen and Assistant Attorney General Tyler Henry of the Antitrust Unit of Attorney General Herring’s recently reorganized Consumer Protection Section.
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