Connecticut legislators and officials reacted to the news that Anthem has agreed to buy Cigna.
If it passes state regulations, the merger would cover 53 million people and make it the largest insurance company.
Hartford has always been known as the insurance capitol and no one really expects that to change. But this merger would mean less competition and that is something many have concerns about.
Anthem and Cigna, which are two insurance giants, are talking about becoming one massive company. The deal is worth $54 billion and would make a big dent, leaving only three major players in the industry.
“I want the DOJ to take look at whether these mergers will affect consumers with increased prices,” U.S. Sen. Chris Murphy (D-CT) said.
Connecticut's Insurance Commissioner Katharine Wade said she also has concerns. Wade said "the proposed acquisition will reduce competition substantially in any line of insurance” and “the Connecticut Insurance Department will conduct a regulatory review of the proposed transaction."
Experts said they believe a driving force behind the mergers may be the Affordable Care Act.
Obamacare has meant more business for major insurers because more Americans have health coverage, but the new law has also put more pressure on industry profits.
"It’s a very complimentary set of businesses coming together, meaning there is not a lot of overlap,” Economic and Community Development Commissioner Catherine Smith said.
Smith said she doesn't feel job loss will really be an issue.
“The good news for us is Cigna, a first five company. They made a bet, a decision to not only move their headquarters here but to grow their population,” Smith said.
Cigna was given financial incentives to stay and grow jobs from 200 to 600.
The mood now is cautiously optimistic. This possible merger comes on the heels of another deal. Earlier this month, the Connecticut-based Aetna purchased Humana.
Anthem provides insurance mostly to individuals while most of Cigna's customers are companies.
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