Anthem remains committed to its roughly $47 billion bid to buy Cigna, a deal that would create a health insurance giant with international reach and added muscle to improve technology for consumers and negotiate rates with providers.
The Blue Cross-Blue Shield insurer said Monday that the two companies would cover more than 53 million people combined, a total that easily surpasses that of current market leader, UnitedHealth Group Inc.
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.
"The proposal we submitted to Cigna presents significant and compelling value for shareholders in a transaction that would bring together two highly complementary platforms with a powerful growth potential," Anthem Inc. CEO Joseph Swedish said in a written statement from the company.
The Indianapolis-based insurer reiterated its commitment to its most recent offer of $184 per share in cash and stock a day after Cigna delivered a caustic response to Anthem's proposal.
Bloomfield, Connecticut-based Cigna Corp. dismissed that offer in a letter sent Sunday to Anthem's board. Cigna said 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 have been expecting consolidation at the top of a health insurance 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 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.
An acquisition also can strengthen an insurer's use of data and technology, which are playing a growing role in monitoring patients and care. At a very basic level, that means things like tracking whether patients are keeping up with their immunizations.
Insurers also are trying to give consumers better information on the cost and quality of the care they buy, since those patients are being exposed to more of the bill through things like high-deductible health insurance.
"In a lot of ways, this is really health care moving in the direction of banking, and there are a lot of positive and negative aspects to that analogy," said Dan Mendelson, CEO of the market analysis firm Avalere Health.
Anthem is currently the nation's second-largest health insurer, while Cigna ranks fourth in terms of enrollment. Anthem specializes in selling individual coverage and insurance to workers of small businesses. It also has grown its government business, which includes Medicare, Medicaid and coverage of federal employees.
Health insurance is Cigna's main business, but it also sells group disability and life coverage in the U.S., and it has a growing international segment that Anthem lacks. Much of Cigna's health insurance business involves coverage where the employer pays the claims and then hires Cigna to administer the plan, a growing and less-profitable form of coverage in employer-sponsored health care.
Shares of Cigna jumped 7 percent, or $10.97, to $166.20 in Monday morning trading—more than $17 per share below the offer—while Anthem rose 4.9 percent, or $8.15, to $173.21.