Proposed Insurer Mergers: Bigger Is Not Better

In July 2015, Aetna Inc. announced plans to buy Humana Inc. in a $37 billion deal that would merge two of the five largest health insurance companies in the United States. The same month, two more of these five major U.S. insurers—Anthem Inc. and Cigna Corp.—announced plans for a merger. The U.S. Department of Justice, or DOJ, is currently reviewing these mergers to determine whether they violate antitrust laws by reducing market competition; collectively, these four companies cover almost 90 million people. Federal law prohibits mergers when the effect “may be substantially to lessen competition, or to tend to create a monopoly.”