Morning Briefing
Summaries of health policy coverage from major news organizations
Anthem Deal Would Result In $3B Being Passed On To Employers, Company's Expert Testifies
Anthem’s $54 billion acquisition of Cigna would create $3 billion in annual savings in the national accounts market. Nearly all of that money would be passed on to customers through cheaper rates, economist Mark Israel testified Thursday at the antitrust trial challenging the deal. Compass Lexecon’s Israel is arguably Anthem’s most important witness. He's providing expert validation to the insurer’s key arguments for why the deal won’t hurt competition in the market for large employers, which is the focus of the first phase of the trial. (Demko, 12/1)
Anthem Inc. could face a penalty of about $3 billion from the national Blue Cross Blue Shield Association if it fails to derive the bulk of its nationwide revenue from Blue-branded products after acquiring Cigna Corp., according to testimony from an Anthem executive during a U.S. antitrust trial in Washington. Twenty-three percent of Cigna’s domestic revenue would need to be rebranded to comply with rules of the BCBS association, said Steve Schlegel, Anthem’s vice president for corporate development, under questioning Wednesday by a Justice Department lawyer. (Harris, 11/30)
As the first part of the antitrust trial on a proposed merger of health insurers Anthem and Cigna is wrapping up, a similar challenge to Aetna’s plan to merge with Humana is about to begin. While both are the result of lawsuits to block the mergers filed by the U.S. Justice Department on the same day in July, the trials will be much different. (Radelat, 12/2)
And in other news from the health industry —
Washington’s insurance regulator said Thursday that Zenefits can no longer offer its human resources software for free in the state, another setback for the embattled health-benefits brokerage that has sought to move past regulatory violations. The order from Washington Insurance Commissioner Mike Kreidler strikes at the heart of Zenefits’s business model, which offers free human-resources software to small businesses so that it can collect commissions when the companies use Zenefits to sign up for health benefits. (Winkler, 12/1)
