Subsidies Stay and Talks of Mergers Resume

With the ruling of King Vs. Burwell in favor of the Obama Administration business moves ahead as normal. Talks of mergers are at the forefront for several of the U.S. healthcare insurers. The Supreme Court ruling had a potential to disrupt the individual market for both individuals and insurers. The top 5 insurers are all considering deals, but two largest mergers that are in the works are Anthem’s bid for Cigna and Aetna acquiring Humana.

Cigna’s board has turned down Anthem’s $54B bid. CNBC quotes, “Cigna believes a merger with Anthem would create a health insurance powerhouse, but the Connecticut-based insurer is still rejecting a $53.8 billion takeover bid from its larger rival, saying the offer is not in the best interest of shareholders.” Cigna has set high demands for the acquisition, and isn’t willing to budge on their demands. Cigna is insisting that David Cordani, current CEO of Cigna, be appointed CEO of the combined company rather than the proposed COO position. They are also being offered 6 of the 14 board member seats, but are requiring half. Needless to say the companies have not come to an agreement and there is no news beyond this. Read more of the CNBC article HERE

If these mergers move forward the United States would be left with three giant health insurers in control of much of the market. From there we will see several mergers within the hospital industry. What do you think of all of these mergers and the effect it could have on premiums? Read more on the Bloomberg Business article HERE

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