CALIFORNIA CONSUMERS AND COMMUNITIES ARE LIKELY LOSERS IF MERGERS ARE APPROVED
June 24, 2016- San Francisco, CA— In response to several recent health care insurer mega-merger proposals,
the California Reinvestment Coalition (CRC) is calling on state health regulators and the US Dept of Justice to
reject these proposed mergers in light of their harmful impacts to consumers and communities, including the
failure of the merging companies to reinvest their premiums into programs that can greatly improve health care
outcomes for Californians.
Insurers in California receive billions of dollars in premiums annually. One obvious place where insurers could
reinvest their premiums is in the California Department of Insurance California Organized Investment Network
(COIN), a program which was developed in 1996 at the request of the insurance industry as an alternative to a
Community Reinvestment Act type community investment requirement for insurance companies. Through
COIN, insurers can invest their premiums in affordable housing and other efforts that support economic and
community development in California’s underserved communities.
However, according to COIN data analyzed by CRC, the insurers who are proposing to merge have largely
ignored the opportunity to invest in COIN. For example, Aetna, Humana, Cigna, and Anthem insurance
companies all reported ZERO participation in the COIN Community Development Finance Institution (CDFI

Tax Credit Investment Program for every year since 1997 and only minimal investments in other COIN
programs as compared to the billions in premiums the companies have collected.
Kevin Stein, associate director at CRC, explains: “These companies are failing to adequately support positive
health outcomes and to diminish racial and ethnic health disparities when they choose to devote millions of
dollars to CEO salaries and horde billions of dollars in California premiums and profits. Instead, they should be
investing some of these dollars in health services, affordable housing and economic development projects and
programs that measurably benefit the health of our communities.”
Aetna Humana proposed merger: Yesterday, California Insurance Commissioner Dave Jones urged the
Department Of Justice to block the Aetna/Humana merger, which the California Department of Managed Health
Care (DMHC) approved (with conditions) earlier this week. Commissioner Jones explained the proposed merger
would lead to a more concentrated market, creating likely negative impacts for the quality, access, and cost of
health care for Californians, especially seniors.
Cigna/Anthem proposed merger: In the case of the proposed Cigna/Anthem merger, California Insurance
Commissioner Dave Jones also sent a detailed analysis to the Department of Justice last week, urging the Dept
to block the merger. Jones highlighted problems with the proposed merger leading to increased concentration in
the market and negatively impacting access, quality, and cost of care for consumers. The DMHC has not yet
weighed in on the Cigna/Anthem proposed merger.
Senators against both mergers: Seven US Senators, including California Senator Dianne Feinstein, also
weighed in on both mergers, urging the Dept. of Justice to block the mergers.
CRC is urging state regulators and the Dept of Justice to require that all pending and future health care mergers
include community benefit plans that include specific provisions on how the insurers will improve health care
outcomes via community investments. As an example, in the recent merger of Centene and Healthnet, the
merger approval by California Insurance Commissioner Dave Jones was conditioned on the companies making
an investment of $30 million in community investments via the California Organized Investment Network
(COIN) program.
The plans should be:
1) Multi-year, long-term commitments to investing in health services, affordable housing, jobs and economic
development in California communities, that also lower health care costs for consumers and increase access to
higher quality health services.
2) Transparent and publicly available; and
3) Commensurate with the larger size of the companies after the size of the acquisition or merger.
Additional Background:
1) To read a copy of CRC’s letter about the proposed Aetna/Humana merger, click here.
2) CRC is supporting California state legislation, AB 2728 (Atkins), which extends the state tax credit program
that awards up to $10 million annually for qualified investments through COIN-certified CDFIs, and brings
transparency to the insurance industry so that that the public can see which companies are investing in
California’s health, and which are not.
3) CRC has supported SB932 (Hernandez), which would increase the authority of state regulators to ensure that
insurance company merger are in the public interest.