CIGNA Corporation (NYSE:CI) CEO David Cordani says that unlike what many people are thinking the $47 billion takeovers of rival Cigna by Health insurer Anthem will not in any way hurt consumers. It any case they will have more to benefit from because it will increase choice and affordability. He stated this in defense of the merger that is perhaps under pursuit of criticism.
The Anthem-Cigna arrangement has come at a time when insurers are under so much pressure to reduce expenses on healthcare for their biggest customers and more employers and the U.S. government.
In an interview with Reuters, Cordani insisted that the treaty would go a long way in aggregating choices and affordability by not decreasing them. In any case, these are results-focused contracts that doctors and hospitals will use to help consumers trim their medical spending.
The business combination is worth $115 billion. However, it may be necessary to dispose of some assets so as to win the required regulatory approval even though Cordani says this would only be on a limited basis.
Apparently, close to 150 million Americans are medically covered by their employers of which many of them are large entities. However, the Anthem-Cigna deal is under condemnation. The American Medical and the American Hospital Associations have issues with it which they have put on paper.
The Congress heard a hearing on insurer competition, and another one is expected in the Senate next week. Joseph Swedish, Anthem CEO and Aetna CEO Mark Bertolini are programmed to appear.
For 12 to 18months, the Department of Justice will review which will scrutinize the overlap in the market share. Cordani is not expecting any competitive issues from the Medicaid and Medicare businesses and neither from the individual business.
So far, there is a lot of positivity from the employers that the blending will empower them to bring together the results-oriented care management programs. Diseases like diabetes that CIGNA Corporation (NYSE:CI) used to cut health care spending in Medicare and the commercial plan will now be connected with the Anthem’s active Blue Cross Blue Shield networks.
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