2 big insurance break-ups on Valentine’s Day
It was a rough day for the already-roiled
Both merger deals had already been rejected by federal regulators and judges, but the companies were considering appeals to those decisions. Now they both appear to be off.
Aetna said it was abandoning its planned
The deals were conceived as a way to help the insurers increase their enrollment and cut down on expenses in part so they could operate profitably in the public insurance exchanges established as part of the Affordable Care Act. Big insurers have been hit with substantial losses from the exchanges, even though they represent a relatively small part of their overall business. Many have already cut back their offerings, and that has slashed customer choices in many markets around the country.
The collapse of one deal and the uncertain future of the other could hurt shoppers on the exchanges next year by leaving them with even fewer options and potentially higher prices. Humana told investors late Tuesday that it was abandoning it exchanges in all 11 of its states as of the beginning of next year.
Humana, based in
Every exchange in the
Morningstar insurance analyst Vishnu Lekraj said it's possible all the four insurers involved in the deals could leave the exchanges.
Aetna, based in
Bertolini said recently that his company would announce by
Government and industry officials have said President
"The clock is definitely ticking for the Trump admin to provide some clarity around what the rules will be," Levitt said.
In suing to end its tie-up, Cigna, based in
Cigna says it is seeking a
The insurer says the damages include the amount Cigna shareholders would have received if the merger had not failed. It noted that Anthem assumed full responsibility for litigation strategy and getting the necessary regulatory approvals, suggesting that it was Anthem's responsibility to push the deal through.
"Cigna fulfilled all of its contractual obligations and fully cooperated with Anthem throughout the approval process," the insurer said in a statement.
An Anthem spokeswoman says Cigna has no right to end the deal, and it remains committed to closing the transaction. The insurer had just filed on Monday paperwork to appeal the federal court ruling.
Anthem and Aetna put their acquisition bids together in 2015 and touted them as a way to grow enrollment and reap savings that they would then pass on to consumers.
The deal would have given Aetna the opportunity to significantly expand its presence in
But the
The deals would have combined four of the nations' five largest insurers.
AP Data Journalist
Texas anti-abortion efforts renew after Supreme Court defeat
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News