Cigna and Humana reportedly are in talks to merge in a deal that could be finalized by the end of 2023. Both companies were involved in potential mergers in 2015 that were later blocked by federal judges: Cigna with Anthem (now Elevance) and Humana with Aetna. Here is a closer at why the Cigna-Anthem deal was blocked:
Washington, D.C., federal judge Amy Berman Jackson blocked the Cigna-Anthem merger in February 2017, finding that the combination of the companies would harm customers, according to an article in The New York Times from the time.
"The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects," Ms. Jackson wrote, according to the article. "It will eliminate the two firms' vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market."
The deal between the companies had also been contentious, with the Justice Department revealing court documents that showed they had accused each other of breaching the agreement, according to the report.
The judge noted the disharmony between the companies in her ruling, citing testimony from Cigna executives who argued that projections of future cost savings were incorrect and Cigna declining to sign off on Anthem's findings of fact, according to the report. She said Anthem tried to minimize the issue as a rift between the CEOs, "but the court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial."
The Cigna-Anthem deal was also seen as riskier than the Aetna-Humana transaction because Cigna and Anthem had significant national overlap, according to the report. Ms. Jackson found the merger would have harmed customers in 14 areas where Anthem competed in the commercial market as well as in the Richmond, Va., market for large group customers.