By Mitchell Young
WASHINGTON: Aetna [NYSE: AET] and Cigna [NYSE:CI] have watched their huge mergers collapse this month under the weight of lawsuits brought by the Obama administration.
The Justice Department won a first round legal ruling against the Anthem [NYSE: ANTM] Cigna deal and Cigna said enough is enough. Anthem said no way, and now the would be couple are talking trash and in court.
Cigna CEO David Cordani was among the health insurance executives that met with the President. Cigna and Anthem are suing the hell out of each other, over their busted deal, both sides are claiming the other guy wanted to scuttle the merger. Some recent reports say that with a new administration, Cigna, Anthem's merger could be resurrected.
Health insurance CEOs met with President Trump on February 28 and are hoping for a friendlier environment for consolidations.The mergers between Aetna and Atlanta based, Humana [NYSE: HUM] and Cigna with Anthem were first expected to go forward, a political backlash ensued and the Justice Department sued to prevent the mergers.
The US District Court in Washington DC, sided with the Justice Department in a ruling in January against the Aetna / Humana merger. The court action was enough fighting for Aetna, who called off the deal, in spite of having to pony up a billion dollars to Humana as a breakup fee.
Aetna CEO Mark Bertolini was once seen as among America's most liberal big company CEOs, as he criscrossed the country arguing for higher wages - $16 in big corporations. Alas, the healthcare titan has learned that "no good deed goes unpunished." Bertolini has been excoriated on social media and in the courts over statments he made about the ACA Healthcare Exchanges. Aetna was accused of threatening to ditch participation in the ACA Exchanges if the Feds didn’t approve Aetna’s merger with Humana. Bertonlini insisted his comments were taken out of context, and said Aetna was losing too much money on the Exchanges and needed the merger for scale. in order to stick with the Health Care Exchanges. He also has said the ACA Exchanges were in a “death spiral,” that could win him big points with the President.
|Aetna CEO, Mark Bertolini , will he take his football to Boston?|
In Connecticut only two insurers still sell health insurance on Connecticut’s Exchange, ConnectiCare and Anthem. ConnectiCare announced they were pulling out of the Exchange in September and then backtracked after a meeting with state officials. Connecticut industry sources have told us, that the State is potentially showing forbearance on ConnectiCare’s finances to keep them in the Exchange.
Connecticut regulators did shut down Healthy CT a Healthcare Insurer provided with $70 million as part of the Obama Adminstrations attempt to create more competition among insurers., HealthyCT like ConnectiCare was popular on the Exchange, but they were overtaken by underwriting loses.
Neither Senator Chris Murphy nor Senator Richard Blumenthal both Democrats supported Aetna or Cigna's merger plans. Murphy said he didn’t “oppose” the merger, but was focused only on Connecticut jobs. Blumenthal demanded the Justice Department stop the mergers.
Aetna has been reportedly looking at office space to move their headquarters to Boston, in what very well could be payback for the a lack of support from Connecticut’s Democratic delegation with the Obama Admiistration