California Insurance Commissioner Expresses Skepticism Over Anthem-Cigna Merger
by Ana B. Ibarra, KQED
State Insurance Commissioner Dave Jones continued to make his skepticism clear regarding Anthem Inc.’s proposed $54.2 billion acquisition of Cigna Corp. during a hearing in San Francisco on Tuesday.
Company executives faced Jones and a panel of physicians and consumer advocates who questioned the benefits the companies say the acquisition will bring.
The California Department of Insurance hearing took a more pressing tone than a related hearing held by the California Department of Managed Health Care earlier this month.
According to Anthem and Cigna, the merger will result in easier access to medical providers for patients and lead to more affordable health insurance policies.
Jay Wagner, Anthem’s vice president and counsel, and Tom Richards, Cigna’s global leader for strategy and business development, said the purchase would cut costs by $2 billion annually.
They told Jones they were “quite confident” in that estimate. But Wagner and Richards said they could not commit to guaranteeing savings for consumers because of factors out of their control, such as the rising prices of specialty drugs.
Brent Fulton, a professor of health economics and policy at UC Berkeley, presented an analysis on the Anthem and Cigna merger at the request of the Department of Insurance.
Theoretically, Fulton said, consolidation could lead to stronger negotiating leverage with hospitals, physician organizations and other providers of health care services that now hold market power, resulting in lower costs for health insurance customers.
“However, we are not aware of any peer-reviewed studies that have found that higher insurer market concentration has led to lower health insurance premiums,” Fulton said.