California considers bill to impose new rules on insurance mergers
The California State Assembly is considering legislation that would require insurance companies receive state approval before they can merge or acquire other health plans.
The bill passed the Assembly Health Committee last week and was introduced in February, shortly after federal judges blocked the marriages of Anthem-Cigna and Aetna-Humana.
The competitive impact of health plan mergers and acquisitions are currently scrutinized by California Insurance Commissioner Dave Jones.
The bill would allow the state’s Department of Managed Health Care to approve any mergers or acquisitions of health plans that operate in the state based on their competitive impact, in addition to the insurance commissioner signoff. Under existing law, the Department of Managed Health Care approves health plan mergers and acquisitions to ensure compliance with consumer protections and financial requirements. The proposed law would require insurers to apply for a license as a new health plan as part of the merger approval process. The department would decide whether to approve that new license.
The department would also have to hold public hearings on proposed mergers; provide customers and patients with data on the deal’s impact to cost, quality and access to care; and determine if the insurer is of “reputable and responsible character.”