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Economy
Judge to block mega-merger of Anthem and Cigna
2017-01-20
[NYPOST] A federal judge is expected to block a proposed mega-merger between Anthem and Cigna -- a $54 billion deal that would create the nation’s biggest health insurer -- as soon as Thursday, sources told The Post.
I dunno why. Single points of failure are so much more efficient.
In what looked like a bid to get ahead of the judge’s smackdown, Anthem said in a public filing early Thursday it is extending the expiration of the merger agreement from Jan. 31 to April 30. Indeed, sources said Anthem can appeal any ruling that doesn’t go its way. Insiders expect that US District of Columbia Judge Amy Berman Jackson will rule against it on antitrust concerns.

President B.O.’s Department of Justice sued Anthem in July, alleging the merger would stifle competition in the US health care industry. The case went to trial in November.

A ruling by Jackson against the tie-up will likely spark a fight between the corporate giants. Cigna is looking to fight any merger extension as it looks to wiggle out of the deal and collect a $1.85 billion breakup fee from Anthem, according to insiders.

Cigna said in a statement that it had received notice of Anthem’s extension and that it would evaluate its options after the court ruling.

According to sources, Cigna believes the bench trial in November produced testimony that shows Anthem didn’t hold up its end of the merger agreement.

For example, a key to the deal was Anthem having a plan worked out to maintain the Blue Cross/Blue Shield networks it operates exclusively in 14 states, including one in New York City. Blue rules require, however, that an exclusive carrier have no more than one-third of its marketed products from other insurers in a given state. A combined Anthem and Cigna would trip that threshold, according to court papers.

On July 25, 2015, Anthem CEO Joseph Swedish said on an analyst call that Anthem in the merger did not "anticipate any issues regarding so-called Blue rules in large measure."

Yet in court testimony on Nov. 30, Anthem VP of corporate development Steven Schlegel said Anthem was facing the possibility of a $3 billion penalty for having too much of its business being non-Blues-related.
Posted by:Fred

#1  What's wrong with this? I thought Single Payer was the goal of the ACA.
Posted by: AlanC   2017-01-20 07:57