For months, the proposed merger of insurance giants Anthem and Cigna was in the news headlines as several groups opposed such an action, citing that such a commanding control of the health insurance market would not benefit patients.
Notably, the American Medical Association, the premier trade group representing the interests of medical professionals and students nationwide, led the majority of the efforts to block such a mega-merger.
Robert Mills, a member of the AMA’s media relations staff, told Patient Daily that the efforts of the organization have had wide-ranging effects for the better.
“Over the course of the last year, the AMA stood up against the mergers of these powerful insurers by submitting testimony in congressional and state proceedings and preparing memoranda to state and federal officials investigating the mergers,” Mills said in an email. “Much of the evidence that led the U.S. Department of Justice and several state attorneys general to challenge these unprecedented deals came from AMA-led efforts to prove the mergers would be anticompetitive.”
The merger effort was halted – with the involvement of the AMA – when a federal appellate court in the District of Columbia reaffirmed a lower court’s decision to halt the $54 billion merger of two of the largest health insurers in North America.
“The appellate court sent a clear message to the health insurance industry: A merger that smothers competition and choice, raises premiums and reduces quality and innovation is inherently harmful to patients and physicians,” AMA President Andrew Gurman said in an April release. “The result of 21 months of advocacy before the U.S. Department of Justice, congressional leaders, state attorneys general, insurance commissioners, and federal court, this outcome shows again that when doctors join together, the best outcome for patients and doctors can be achieved.”
In May, the merger was dealt another blow after a judge for Delaware’s Court of Chancery said that Cigna retained the right to withdraw from the merger agreement after Anthem sued them for allegedly breaching it.
In a statement released May 12, Anthem commented on the court's decision to deny its motion for a preliminary injunction.
"Since the transaction was announced, Anthem has worked hard to complete the merger, one that was approved by over 99 percent of the votes cast by the shareholders of both companies," a release said. "Anthem believed this acquisition was a truly compelling opportunity to positively impact the health and well-being of its members, and to expand access to high quality affordable health care for consumers."
Anthem went on to say that after the court's decision and Cigna's desire to withdraw, it gave notice of its intention to terminate the agreement and said Cigna wouldn't receive a termination fee.
"Cigna has failed to perform and comply in all material respects with its contractual obligations," the release said. "On the contrary, Cigna’s repeated willful breaches of the merger agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna."
Anthem and Cigna have scaled back their business dealings in states with health care exchanges implemented by the Affordable Care Act, also known as Obamacare, citing that costs are too great to operate in such markets.
