Cigna rejects overture from Anthem

The world of American health insurance soon might become even smaller, with the biggest companies seeking to become even bigger.

A scramble has broken out within the industry as various providers jockey for position and make overtures to rivals. Anthem Inc. made the first public move, unveiling a $47 billion takeover bid for Cigna on Saturday after months of negotiations had stalled. On Sunday, Cigna fired back, rejecting the bid as “inadequate and not in the best interest of Cigna’s shareholders.”

But others have been maneuvering as well. UnitedHealth Group, the biggest American health insurer by revenue, recently made a preliminary approach to Aetna, a person briefed on the matter said.

And a number of companies have indicated their interest in buying Humana, one of the smaller major insurers but with a valuable Medicare franchise. Among those companies that had expressed interest is Anthem, though the bigger insurance provider is focused on combining with Cigna. Another is Cigna.

Driving the flurry of merger discussions has been the passage of the Affordable Care Act, which transformed the health insurance industry by expanding the government Medicaid program for lowincome people in many states and giving insurers access to millions of additional customers through state marketplaces.

Other parts of the health care industry, from drug manufacturers to device makers, have seen enormous amounts of merger activity. But the insurance sector has lain relatively dormant for the past three years, after a brief flurry of deals by the big insurers.