Cigna-Anthem deal loses in appeals court

WASHINGTON — A federal appeals court on Friday left in place a decision blocking Blue Cross-Blue Shield insurer Anthem’s bid to buy rival Cigna, saying that a bigger company is not better for consumers.

The 2-1 decision upholds a federal judge’s ruling in February that said the proposed $48 billion acquisition would further reduce competition in the already concentrated health insurance market.

Anthem argued the combination would save $2.4 billion in medical costs and lead to lower premiums. But the Justice Department said Anthem had no real plan to reach those savings. The government sued last summer to block the deal amid concerns over its effect on prices and consumer choices. The case went to trial late last year.

The ruling from the U.S. Court of Appeals for the District of Columbia Circuit likely dooms an acquisition bid that has lasted nearly two years. Even Cigna has soured on the deal, filing a separate lawsuit seeking a $1.85 billion termination fee from Anthem and billions more in damages.

Consumer groups also had opposed the deal, arguing it would leave consumers fewer choices. Industry experts suggested any consumer impact from the deal would take years to materialize and could lead to savings in some areas but higher costs elsewhere.

Writing for the majority, Judge Judith Rogers said the lower court was correct to halt the acquisition “based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect” of the deal. Sam Hananel and Tom Murphy are Associated Press writers.