The state’s stop insurance official has asked the Department of Justice to block the merger.
California Insurance Commissioner Dave Jones is urging the U.S. Justice Department to stop CVS Health from merging with Aetna. Such a merger would “have significant anti-competitive impacts on American consumers and health care and health insurance markets,” said Jones.
The Californian regulator cannot stop the deal, but he can use his sway with the D.O.J.
Even though the California Insurance Commissioner does not have the authority to stop a merger between the companies by way of his findings and recommendation, he can still use his influence. It is in this way that he is hoping to be effective in reaching his goal. He is hoping to convince the U.S. Justice Department as it makes an evaluation of the merger.
Dave Jones has described the evaluation of the CVS Health and Aetna merger by the Justice Department as an “open” one. He issued a 15 page letter to the D.O.J. to share his explanation and reasoning for his opposition to the deal.
The California Insurance Commissioner made a statement to the media about his position.
“The proposed merger of CVS and Aetna will significantly reduce competition in the PBM and Medicare Part D markets, affecting millions of health care consumers throughout the country,” he said in a statement. He added that the size and nature of this merger would force prices upward and quality downward, according to health insurance and health care merger experts.
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This statement was made following a June hearing that involved medical care provider testimony – such as that of American Medical Association doctors – who strongly recommended that the California Insurance Commissioner do what he could to bring a halt to the deal. Also testifying at that hearing were execs from both CVS Health and Aetna.
“We urge other state regulators to review the evidence and take similar action,” said Dr. Barbara McAneny, the president of the American Medical Association, upon hearing the news of Dave Jones’s decision.
CVS released a statement for a Forbes report stating that it “strongly” disagreed with the recommendation from the California Insurance Commissioner to the D.O.J.