Shortly after Aetna and Humana announced their planned merger, Anthem and Cigna followed suit. On Friday, July 24, Anthem made public its definitive agreement to acquire Cigna Corporation for a total valued transaction of $54.2 billion.
Currently, Anthem is the nation’s second largest health insurer. Merging with Cigna would culminate in the creation of the largest private health insurer (based on membership), serving approximately 53 million members. The Aetna-Humana and Anthem-Cigna mergers will significantly change the health insurance landscape, bringing the country’s amount of large insurers from five to a mere three.
The important difference to note between the Aetna-Humana merger and Anthem-Cigna merger is the membership audience. For Aetna, the acquisition signals an expansion in Medicare Advantage. For Anthem, the most notable affect will be in commercial insurance.
At this time, analysts speculate whether or not this onset of mergers will lead to higher premiums or anti-trust concerns. As large players in the transforming health insurance landscape, both companies will have an advantage in terms of rate negotiation with care providers. With decreased insurer competition, smaller care providers may find themselves at a disadvantage in the realm of payment and coverage negotiation.
Much like the statement from Humana’s president and CEO, Anthem and Cigna leaders addressed the ability to forge a more innovative path in insurance due to the merger, and ultimately, an increase in efficiency and quality.
Anthem president and CEO Joseph Swedish stated in the July 24 announcement:
“We are very pleased to announce an agreement that will deliver meaningful value to consumers and shareholders through expanded provider collaboration, enhanced affordability and cost of care management capabilities, and superior innovations that deliver a high quality health care experience for consumers. We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve.”
We will continue to update you on developments regarding both mergers and possible regulatory measures.