Consumers Union, the public policy and advocacy division of nonprofit Consumer Reports, testified before and submitted a letter to the California Department of Insurance on the proposed acquisition of Cigna Corporation (“Cigna”) by Anthem, Inc. (“Anthem”). From its founding, Consumers Union has striven for a marketplace of safe, effective, reliable, and fairly priced products and services; access to affordable, high quality health care and coverage have always been deeply embedded in that mission. The advantages for health plans that merge are clear, but the advantages for consumers are not. In fact, we anticipate that a more consolidated insurance marketplace will lead to higher costs for consumers, with potentially lower quality products. While consumers around the nation await the outcome of the U.S. Department of Justice’s investigation of this proposed merger, Californians also rely on our state regulators to take action as may be necessary to ensure that the sum of the merging plans is better than what consumers get when the plans stand alone.

In particular, in our letter, we draw attention to: (1) the dominant, collective status of these insurers in California, (2) the fact that market consolidation is far more likely to benefit the carriers than the consumers, and (3) that increased market power may mean worse insurance products for consumers.