The U.S. Court of Appeals for the D.C. Circuit upheld a lower court ruling from February that blocked the two insurers from merging on grounds that the combination would harm competition, particularly in the national employer market.
Two judges on the three judge panel said the district court didn’t err in its findings.
“We hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger in the fourteen Anthem states: the loss of Cigna, an innovative competitor in a highly concentrated market,” the opinion, penned by Judge Judith Rogers, states.
Judge Brett Kavanaugh dissented, saying the merger wouldn’t substantially lessen competition for large employer insurance services.
“The problem with this merger, if there is one, is in its effects in the upstream market — namely, its effects on hospitals and doctors as a result of Anthem-Cigna’s enhanced negotiating power,” Kavanaugh wrote.
Anthem and Cigna could appeal to the Supreme Court or request a hearing en banc at the D.C. Circuit.
The insurers initially struck up a deal to merge in July 2015. The Justice Department, 11 states and the District of Columbia sued the block the merger in July 2016 and won a preliminary injunction.
Shelby Livingston is an insurance reporter. Before joining Modern Healthcare in 2016, she covered employee benefits at Business Insurance magazine. She has a master’s degree in journalism from Northwestern University’s Medill School of Journalism and a bachelor’s in English from Clemson University.