Anthem vows to fight DOL Suite Regarding Cigna Merger
Anthem Remains Committed To Merger With Cigna, Vows To Fight DOJ Suit.
The Wall Street Journal (7/27, Grant, Subscription Publication) reports that Anthem is still committed to the merger with Cigna. Anthem is dealing with higher-than-anticipated medical costs, which is impacting profit. The article says the merger with Cigna may help to lower those costs.
Reuters (7/27, Berkrot, Penumudi) reports that Anthem vowed to fight the Administration’s efforts to block the merger. CEO Joseph Swedish said, “To be clear, our board and executive leadership team at Anthem is fully committed to challenging the (U.S. Department of Justice’s) decision in court.”
The AP (7/27, Murphy) reports that Swedish also said the merger “would help stabilize pricing in the volatile public exchanges created by the Affordable Care Act.” This stability “would enable his company ‘to continue its commitment to the public exchanges’ – a statement industry experts see as a sign that Anthem could slash its exchange business if the government succeeds in scuttling the deal.”
Bloomberg News (7/27, Harris) reports that in a court filing, Anthem argued that its “acquisition of Cigna will significantly increase consumers’ access to the exchanges with the combined firm entering into new territories in nine states where the two firms are not currently participating.”
Similarly, contributor Bruce Japsen writes in a Forbes (7/27) piece that Swedish said on Wednesday that “the Justice Department didn’t take into consideration Anthem’s presence in the individual and small group business, particularly selling subsidized policies on public exchanges under the Affordable Care Act,” and argued that the merger will allow prices in ACA marketplaces to stabilize.
Congressional Quarterly (7/27, Mershon, Subscription Publication) also covers the story.
Anthem’s 2Q Profit Beats Estimates, But Company Expects Loss On ACA Business. The Wall Street Journal (7/27, A1, Mathews, Subscription Publication) reports that on Wednesday, Anthem Inc. posted second-quarter earnings which beat analysts’ expectations. The company said it had profit of $780.6 million, or $2.91 per share, compared to $859.1 million, or $3.13 per share a year ago, while revenue rose by 7.2 percent to $21.46 billion. But, the insurer predicted it will most likely suffer a “mid-single-digit” loss for 2016 on its Affordable Care Act business.
Bloomberg News (7/27, Tracer) reports that on an adjusted basis, Anthem earned $3.33 per share, “compared with the $3.23 average of estimates compiled by Bloomberg.” Anthem said it remains committed to the merger with Cigna.