-From Christopher Westfall
July 21, 2016
The Justice Department has filed two separate suits to prevent the merger between both Aetna and Humana and the merger of CIGNA and Blue Cross.
Today, Aetna said that they will defend their acquisition of Humana and gave the substantial reasons why such a merger is a good thing for the country.
Among the reasons given, Aetna says that the combined company would “Improve affordability, quality, and consumer choice.”
Their stats show that a combined Aetna/Humana company would still only serve 8% of eligible Medicare beneficiaries, far from the monopoly that the Justice Department will argue would result from the combined forces.
We are continuing to monitor the situation and expect that Obama’s Justice Department will do everything in their power to prevent the merger, and it might ultimately be settled by a federal judge.
Cigna Corp. was banned from marketing its Medicare products to new customers, after the U.S. found deficiencies in how the health insurer ran its plans, citing widespread violations that the government said threatened patients’ health.
“Cigna has experienced widespread and systemic failures impacting Cigna enrollees’ ability to access medical services and prescription medications,” the U.S. said in a Jan. 21 letter to the insurer outlining the sanctions. “Cigna has had a longstanding history of non-compliance” with requirements from the Centers for Medicare and Medicaid Services, or CMS.
Cigna and other insurers offer a privately run alternative to traditional Medicare, which includes insurance coverage for hospital and doctor care, known as Medicare Advantage, as well as prescription drug coverage, or Part D. CMS found problems involving Cigna’s appeals and grievances process, as well as with its drug coverage, the insurer said Friday in a regulatory filing.
Shares of Cigna, which is being bought by Anthem Inc. for about $48 billion, rose 0.1 percent to $140.33 at 10:09 a.m. in New York. Anthem remains committed to the deal, spokeswoman Jill Becher said in an e-mail.
“Cigna is working to resolve these matters as quickly as possible and is cooperating fully with CMS on its review,” the health insurer said in the filing, adding that the sanctions don’t affect benefits offered to current enrollees.
For now, the ban mainly affects Cigna’s marketing to people who age into Medicare, the U.S. health program for people 65 and older. Medicare beneficiaries are allowed to shop for new plans every year during a period known as open enrollment that runs from Oct. 15 to Dec. 7.
Cigna, which mainly offers coverage via employers, expanded in Medicare with the acquisition of HealthSpring Inc. in 2012. The company has about 543,500 Medicare Advantage clients and about 1.1 million people in its prescription drug plans, according to data compiled by Bloomberg Intelligence.
Today it was officially announced that CIGNA and Anthem have struck a deal to become, for now, the largest health insurer in America. The terms of the final deal finally having weathered the storm of a two-month long negotiation, the deal is said to be worth $48 Billion to CIGNA for its acquisition into Anthem.
The independent market is still waiting to hear how this will impact the Medicare Supplement and Medicare Advantage distribution channels. The deal might take two years to get through regulator’s approval.
As always, we’ll have the specific news when it’s available as to how this will impact the individual agent. – Stay tuned!
See the announcement:
See the video:
CIGNA has entered into an agreement, pending regulatory approval, to purchase Sterling Life Insurance Company from its current owner, Wellcare. Wellcare purchased the fledgling Sterling Life just three years ago, and tried to turn around its sinking sales of Medicare Supplements, without success. Now, CIGNA hopes to sell their ancillary products to the Sterling clients.
CIGNA’s official e-mail to agents can be found here.
For details on how this might impact the competitive nature of Medicare Supplement selling, make sure to watch the Medicare training webinars inside MedicareAgentTraining.com