Anthem-Cigna Merger Affected by Blues Plans

The large employer market is playing the lead role in the Anthem-Cigna merger lawsuit. The Department of Justice stated that the health insurance merger would create major concentration when selling health plans and services to large employers. (Health Affairs Blog, December 28, 2016)

One interesting aspect of the Anthem-Cigna merger lawsuit deals with the Department of Justice claim that only four health insurers serve on a national scale: Aetna, UnitedHealthcare, Cigna, and the Blue Cross network, with Anthem as its largest member. However, the defense for the Anthem-Cigna merger lawsuit allege that the Blue plans actually compete amongst themselves and that other competitors make an impact on keeping pricing in the market fair.

When it comes to the potential competition or lack thereof between Blue Cross health plans, the Department of Justice argued that the requirements for Blue Cross Blue Shield members allow them to compete as a single health plan countrywide. Blue health plans are not allowed to compete in the same territories using a Blue plan label, Health Affairs reported.

Blue Cross and Blue Shield companies offer a variety of insurance products to all segments of the population, including large employer groups, small business and individuals.  The Blues® currently serve 85% of Fortune 100 companies and 76% of Fortune 500 companies.  Moreover, the Blues have enrolled more than half of all U.S. federal workers, retirees and their families, making the Federal Employee Program the largest single health plan group in the world.

Blues organizations historically operated as independent companies generally in single-state territories but the market landscape has changed considerably in the last 20 years. Now many Blues companies have operations in more than one state and it is not uncommon for companies to offer both Blues branded and non-Blues products. By virtue of market share and strongholds in local communities, the Blues brand gives these plans a significant competitive advantage.

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