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Assistant Attorney General Makan Delrahim of the Antitrust Division of the U.S. Department of Justice issued the following statement today in connection with the closing of the Division’s investigation into the proposed acquisition of Vantage Holdings, Inc. (Vantage) by Louisiana Health Service & Indemnity Co. d/b/a Blue Cross Blue Shield of Louisiana (Blue Cross):
“After a thorough investigation of the proposed transaction, and after working with the Louisiana Attorney General’s office and the Louisiana Department of Insurance, the Antitrust Division determined that the combination of Blue Cross and Vantage is unlikely to result in harm to American consumers.”
In October 2018, the parties announced that Blue Cross would acquire a majority ownership in Vantage. The Louisiana Department of Insurance held a public hearing and approved the transaction in December 2018, contingent upon the Antitrust Division’s approval.
The Antitrust Division conducted a comprehensive seven-month investigation, during which it reviewed documents, analyzed data, took testimony, and interviewed industry participants. In particular, the Division analyzed whether the merger would substantially lessen competition in the sale of health plans sold to individuals on the public exchange established by the Affordable Care Act or health plans sold to individuals off of the public exchange. Multiple types of evidence indicated that the merger is unlikely to harm consumers in the sale of on-exchange or off-exchange commercial individual health insurance plans. Vantage’s membership in these products has been rapidly declining in recent years. Moreover, Vantage has set premiums significantly higher than comparable Blue Cross products, and Vantage therefore does not appear to have a competitive impact on Blue Cross product pricing. In New Orleans, for example, the price of the lowest-cost Vantage silver plan in 2019 is greater than 60 percent more expensive than the lowest-cost Blue Cross silver plan (i.e., the plan with the most widely selected level of coverage), a price gap that has widened substantially in recent years.
For these and other reasons, the Division determined that the transaction is unlikely to harm consumers and therefore closed its investigation.