Anthem's proposed purchase of Cigna could raise health costs for big companies, a study for Reuters has found. Fred Katayama reports.
A study suggests Anthem's proposed $48 billion purchase of Cigna could hike health insurance costs for big companies. That's contrary to Anthem's argument that a bigger Anthem could wring deeper discounts from doctors and hospitals to hold down medical costs. The research done by Aon Hewitt produced for Reuters found another potential issue for the deal: 80 percent of companies with more than 10,000 employees buy worker health benefits from just one or two insurers. Cigna and Anthem are two of just four national players in the market for employer health insurance. The Justice Department, which is reviewing the deal, declined to comment. University of Wisconsin Law School antitrust expert Peter Carstensen (he's a professor emeritus fyi) said, "The Aon Hewitt data on its face is bad for the deal and hurts their chances of getting approval." Investors have been skeptical the deal would get done. Cigna shares trade at a huge discount to the offer price. Anthem says it expects to hear a decision from regulators in July.