In a thorough opinion evaluating the legality of a health insurance merger under antitrust law, the U.S. Court of Appeals for the District of Columbia Circuit considered whether and when efficiencies may offset competitive concerns. Rejecting arguments that anticipated health care cost reductions should spare Anthem’s proposed acquisition of Cigna from an antitrust challenge, a split panel of the D.C. Circuit upheld an injunction blocking the proposed merger because it was likely to lessen competition without offsetting benefits.
Anthem, which is licensed to operate under the Blue Cross Blue Shield brand in 14 states, reached an agreement in July 2015 to merge with Cigna, with which Anthem competes in those 14 states. The U.S. Justice Department, 11 states, and the District of Columbia filed suit to enjoin the merger on the ground that it was likely to substantially lessen competition in at least two markets. Anthem pressed the point that any anticompetitive harm resulting from combining the second and third largest health insurers would be outweighed by the efficiencies generated from lowering fees paid for health care services. Unpersuaded, the district court enjoined the merger.
