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California Insurance Commissioner Opposes Anthem-Cigna Merger, Echoing Concerns Raised By Consumer Groups

Commissioner Finds Merger Would Mean Higher Premiums,
Reduced Access And Lower Quality Care For Californians

SACRAMENTO, CA (June 16, 2016) – California Insurance Commissioner Dave Jones announced today that he opposes the proposed merger of Anthem and Cigna and strongly urged the U.S. Department of Justice to block the transaction after concluding that it would result in higher premiums, lower quality of care, and reduced access for many Californians. Today’s announcement by Jones echoed many of the concerns that have been raised about the deal by Consumers Union, the policy and advocacy division of Consumer Reports.

“This mega merger may be a great deal for Anthem, but consumers stand to pay more for coverage while getting less access to the care they need,” said Dena Mendelsohn, staff attorney at Consumers Union. “We urge the Justice Department to take Commissioner Jones’ findings to heart, and to ensure that competition in the health insurance marketplace is preserved and consumers are protected. As the California Department of Managed Health Care and Attorney General Kamala Harris complete their review of this merger, we hope they will carefully consider the Commissioner’s findings.”

In July, 2015, Anthem and Cigna announced their plan to merge, with Anthem acquiring Cigna. Consumers Union has been raising concerns about the harmful impact of this merger, as well as the Aetna-Humana merger, also under review. Consumers Union also testified on Anthem’s history of rate setting as well as ongoing quality issues.

The proposed merger would make Anthem the largest health insurer in the nation, bringing further concentration to an already heavily consolidated market. According to an analysis by the California Department of Insurance, the merger would give Anthem control of more than 50 percent of the market in 28 of the state’s counties, and 40 percent market share in 38 counties. As a result, consumers can expect less access to quality care and higher premiums. Anthem has indicated that it expects the merger to result in $2 billion in efficiencies but won’t make any pledges to pass those savings on to policyholders.

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Contact: Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 7606

Consumers Union is the public policy and advocacy division of Consumer Reports. Consumers Union works for health reform, food and product safety, financial reform, and other consumer issues in Washington, D.C., the states, and in the marketplace. Consumer Reports is the world’s largest independent product-testing organization. Using its more than 50 labs, auto test center, and survey research center, the nonprofit rates thousands of products and services annually. Founded in 1936, Consumer Reports has over 8 million subscribers to its magazine, website, and other publications.