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Sunday, April 14, 2024

Cigna-Humana Deal Might Hit Antitrust Obstacles: Wells Fargo Analysts

Federal regulators may block any efforts by Cigna to mix with Humana, despite the fact that the businesses seem to have little apparent operational overlap, in response to Wells Fargo securities analysts.

Humana has an 18% share of enrollment within the Medicare Benefit market, and Cigna has only a 2% share in that market, in response to KFF.

However Stephen Baxter and different Wells Fargo analysts be aware that Cigna has targeted on constructing a massive share of the market within the states the place it does provide Medicare Benefit plans: It has a 25% share in Texas, a 15% share in Tennessee and a ten% share in Arizona.

“Latest antitrust enforcement has been fairly vigorous, and we’d seemingly anticipate a comparatively drawn-out course of,” the analysts write.

What it means: Cigna and Humana may make an enormous deal, however they won’t. In the event that they do, and also you’re in Texas or Tennessee, it’s attainable that any purchasers with Cigna Medicare Benefit plan protection will find yourself with a brand new protection supplier due to divestitures Cigna must make to get antitrust regulator approval for the deal.

The supply: The Wall Road Journal on Wednesday reported information of the talks in an unique article.

The businesses may announce a stock-and-cash deal by the top of the 12 months, the paper reported, citing “folks accustomed to the matter.”

The businesses: Cigna is a Bloomfield, Connecticut-based firm that’s an enormous participant within the company well being plan, well being care companies, dental plan, pharmacy advantages administration and Medicare Half D prescription drug protection markets.

It reported $1.8 billion in web earnings for the third quarter on $49 billion in income.

It supplies or administers main medical protection for 20 million folks, together with about 600,000 Medicare Benefit plan enrollees.

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