BREAKING: Anthem Announces Intent to Acquire Cigna

Whenever I hear the notification of an email to my business account after 8pm on a Friday, I know it’ll be something juicy. Nice PR move: release something slightly controversial (or very controversial) on a Friday, hoping it will be forgotten by next Monday’s news cycle.

WELL, I received one such notification last night and to my surprise, the Subject Line says, “Cigna Anthem Announcement.” Cigna Anthem Announcement? But those are two different things? Well, apparently not for long if everything goes as they plan, with a merger deal on the table.  The announcement says they expect finalization of the merger in the second half of 2016. They state that the “combined company” will expand networks for patients and make care more accessible. Anthem already has a strong medicaid network which has become increasingly important with the Affordable Care Act. Cigna will be able to utilize this, while those covered by Anthem will now have access to Cigna’s broad network of specialty care.

Why does this matter and how will things change?

Cigna Anthem Merger

Cigna Anthem Merger

Well, for us here at In Charge Office Solutions and most people who deal with insurance companies daily, you get to know each insurance company and their medical policies, procedures, and authorization processes. Cigna and Anthem have been quite
different companies to deal with to this point, and should the acquisition go through it will be interesting to see how/if those things change.

Beyond this, the insurance industry is already a relatively narrow one with large, recognizable companies covering the majority of people. Small insurance companies are few and far between, and often cannot compete with the larger companies. When a person is offered insurance coverage through their employer, there are usually only two or three options. Does the industry really need to narrow the field even more, taking a major player out? It is doubtful another will rise in its place.

This brings me to the most important point: this is definitely not a done deal.

It faces scrutiny by the Department of Justice and the Federal Trade Commission who have to review the agreement for antitrust issues. It also was not well received in the business world, with shares falling for both companies.

Whether or not it does go through, the agreement is a sign of the changing times in the industry. With such rapid changes in regulations, it is inevitable that insurance companies will restructure and adapt. Adaptation has always been a necessity in our business, so we will continue to do just that.

 

Speak Your Mind

*