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2 ways Anthem can make its Cigna merger comply with Blue Cross rules


In addition to the scrutiny it will face from federal and state regulators, another major hurdle involved in the Anthem-Cigna merger is how the deal will interact with Anthem's membership in the Blue Cross Blue Shield Association (BCBSA).

Anthem CEO Joseph Swedish addressed the issue directly during a call with investors after the two companies announced their deal, saying that "we are a 'Blue' organization and will remain blue--I want to underscore that." Anthem has analyzed how the merger would affect its BCBSA membership and has started a discussion with the association about the issue, he said.

The BCBSA "routinely review[s] mergers and acquisitions involving our member companies to ensure compliance with the standards that the Blue Cross and Blue Shield brands have established over generations," spokeswoman Marie Cocco told the Indianapolis Business Journal in an email.

In order to comply with the Blue rules, the article states, Anthem can employ two distinct strategies:

  1. It could ask Cigna's customers who reside in the 14 states where Anthem operates a Blue Cross plan to switch to Anthem for their coverage. This could backfire, however, as many of Cigna's clients are large employers accustomed to shopping around for insurance, meaning they could react by simply switching insurers. Thus, Anthem is surely factoring into its calculations the fact that it will lose the business of some Cigna loyalists, the article notes.
  2. Anthem could focus on attaining Cigna clients in states where it does not have a license to operate Blues plans by asking companies that employ workers in multiple states to switch their business to Anthem. Anthem can still serve customers in states where it doesn't operate a Blue Cross plan via the Blue Card network, the article points out, though Anthem would have to pay other Blue Cross plans in these states to process patients' claims. Swedish has said that because non-Anthem Blues plans would reap a financial benefit from this arrangement, it gives them even more reason to support the deal, according to the article.

However, if Anthem decides to sell coverage under a different brand name such as Amerigroup in the states where it doesn't have a Blues plan license, that could set it in direct competition against other Blues plans nationwide.

To learn more:
- read the article

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Why Blue Cross has been quiet on the Anthem, Cigna deal
How Anthem and Cigna went from hostile takeover to friendly merger
Anthem to acquire Cigna in $54.2 billion deal
Cigna, Anthem trade barbs over 'deeply disappointing' takeover bid