Tuesday, 5 April 2016

Cigna-Anthem Merger Receives High Criticism

The American Medical Association is warning the market that the Anthem-Cigna merger can become problematic.
Cigna Corporation has been making headlines for a while due to the proposed acquisition by Anthem worth $54.2 billion. Now many are criticizing this merger, including the Insurance Commissioner of California Dave Jones, who is also skeptical. Jones believes this acquisition to be unfair and beneficial to Anthem, he even announced this in a hearing on Tuesday.
The global health company action is also criticized by the American Medical Association that has even sent out a warning to the Department of Insurance in California. The AMA warns that this merger is going to be fatal to the market. According to the analysis of the AMA, Anthem already has a strong presence in the health services market and this merger will give unfair competition to the rivals, even stopping them from succeeding in the industry.
On the other hand, both these healthcare companies believe that this merger will prove to bring more benefits through giving medical providers more access to their patients and affordable health and life insurance services. The vice president of Anthem, Jay Wagner, and Cigna global leader for strategy, Tom Richards, believe that this merger is going to help them cut costs by approximately $2 billion each year; they remain confident. However, they do not promise that this will help consumers save money due to reasons that would be out of their control, including the expensive special drugs and medications.
Many advocacy agencies are pressurizing Jones to block this sale while others are seeking for policies that will help protect the consumers. Jones remains skeptical as to whether this merger will help or affect the consumers badly. He has enough power that he can block this merger from happening which will not be good for these healthcare companies, thus both of them will have to provide enough evidence on what is actually going to happen. The AMA said on Tuesday that this acquisition is violating antitrust guidelines in California.
The market of healthcare in California is going to become anti-competitive according to the AMA, playing a negative impact on quality affordability and access to healthcare. Anthem did not make any comments immediately regarding these accusations. No concrete proofs of these intimidations and speculations have come forward, which is an indication that for now this merger is safe. The acquisition is one of the merges that is going through the review of regulators while another one is on pending.
This Anthem-Cigna merger awaits the approval of 23 other states, Jones has even requested for further information regarding this merger and a recommendation from two other companies. He is putting the customers first, according to his statement. These companies shall keep their finger crossed till then and hope that the decision turns out to be in their favor.

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