Anthem reaffirms commitment to its $47 billion bid for Cigna

The Anthem logo is shown at the health insurer's corporate headquarters in Indianapolis. Anthem on Monday reaffirmed its commitment to buy rival Cigna a day after Cigna shot down the idea in a letter delivered to Anthem's board. (Michael Conroy ~ Associated Press)

Anthem sees its more than $47 billion bid to buy rival Cigna as a way to muscle up on technology that helps consumers and to strengthen its rapidly growing Medicare Advantage business.

Leaders of the Blue Cross-Blue Shield insurer reaffirmed Monday their commitment to getting a deal done a day after Cigna shot down the idea in a letter to Anthem's board.

"We think we've put forward a very compelling offer," Anthem chief financial officer Wayne DeVeydt said when asked during a conference call whether his company would consider raising its price.

The Indianapolis insurer said it has made several offers to buy Cigna and has been talking with the company since last summer.

The combination would create a health insurer with international reach that covers more than 53 million people, making it the largest in the United States based on enrollment.

Anthem Inc.'s most recent offer amounted to $184 per share in cash and stock, which represents a premium of more than 35 percent to the closing price of Cigna shares in late May, before reports of industry merger talks started heating up.

But Bloomfield, Connecticut-based Cigna Corp. said Sunday in a letter to Anthem's board it saw a number of obstacles standing in the way of a deal that "under the right circumstances" would provide substantial benefits to consumers, doctors and investors.

Analysts and other experts are expecting consolidation at the top of an industry that has had to adjust to the health-care overhaul and is dealing with slow growth in the biggest piece of its market, employer-sponsored health insurance. They see several potential advantages to a big combination.

A larger insurer can gain more leverage and negotiating power to use in hashing out rates with care providers. But that advantage may be limited by regulators who will seek to make sure the acquiring insurer doesn't gain an unfair advantage in any market.

Anthem said the combined insurer would have a much broader base over which to spread costs and expenses, and it could make technology investments over the industry's biggest customer pool.

Data and technology are playing a growing role in monitoring patients and care. At a basic level, that means things like tracking whether patients are keeping up with immunizations.

Insurers also are trying to give consumers better information on the cost and quality of the care they buy, based on their coverage.

Deductibles and other out-of-pocket costs have been rising for years.

That leaves a growing number of consumers with bigger bills to pay before most of their insurance coverage starts, so it can encourage more to shop around.

Anthem officials also noted a Cigna deal will build their company's Medicare Advantage enrollment in states such as Texas and Florida. Medicare Advantage plans are privately run, fast-growing versions of the federally-funded program for people over age 65 and the disabled.