CIGNA CEO Explains Why The Anthem-CIGNA Deal Won't Face Antitrust Issues

David Cordani, CIGNA Corporation CI president and CEO, was on CNBC to discuss how the $47 billion CIGNA and Anthem Inc ANTM merger deal is complementary and why he is hopeful that there won't be any antitrust issues and the deal will be closed.Here is what he said.

The Companies Are Complementary

"The key to our transaction is the two companies are quite complementary," Cordani began. "So, in general we operate in different businesses; For example about $20 billion or over half of our revenue are in businesses that Anthem is not in. So one is they are complimentary in nature. Two is the fact that both organizations are focused on partnering with physicians and individuals to improve health quality, to improve health costs."

The Market Has Changed

He continued, "And I think the third point is today the way the market works is very different than the way the market worked a half-a-dozen years ago. Most employers are self-funded today, which means there's a transparent relationship. If quality goes up and cost goes down, employer cost go down, individual cost go down."

Good For Everybody

"And lastly, with the Affordable Care Act, with medical loss ratio thresholds, if medical cost perform below that they get refunded and rebated. So in the new more modern marketplace with transparency in alignment of incentives, when costs go down you have to improve quality to lower cost, that's good for everybody."

"And then the cost improvements go back to the employer, the governmental entity and/or the individual. So, we don't see that as a risk. Having said that, highly complementary transaction and we are confident that once the regulatory process is done, it will be closed," Cordani concluded.