- With Anthem and Cigna slated to go up against the Justice Department next Monday in a trial that challenges their proposed merger, court briefs indicate the two sides are at odds over the premise of the case.
- When the DOJ brought its challenge against the merger in July, it argued the pairing of the two companies would increase costs for consumers as well as negotiating power against hospitals and providers, though the agency now says they "are not required to show that Anthem will increase prices, decrease provider reimbursement, or cause the quality of medical care to diminish," the Hartford Courant reported.
- While the DOJ argues it's sufficient to show the merger would increase the combined company's market share in a market that's already concentrated, Anthem is working to turn the DOJ's arguments back against it.
The two sides show they disagree over both the impacts that can be expected from the deal, as well as what the DOJ needs to prove in its arguments against it.
Anthem is arguing the DOJ's point that a more powerful Anthem would contain costs at healthcare providers actually proves the deal would be good for consumers, the Courant reported, saying self-insured companies that use Anthem to administer their plans would benefit from lower negotiated reimbursement rates.
"This is an extraordinary action in which federal and state competition authorities, are, according to their own allegations, seeking to deprive American consumers of lower health care costs," the Anthem brief stated.
Anthem further argued the DOJ is failing to recognize it is not a national insurer with a national network, but a regional insurer operating in 14 states and renting Blue Cross/Blue Shield networks for any coverage it provides beyond those states. With the proposed merger, Anthem would gain Cigna's nationwide network and truly become a national insurer, the company said, adding that still wouldn't give it a monopoly on pricing power because other regional insurers could continue to compete with it nationally by renting networks, just as it has done.
However, the DOJ could have an easier time prevailing in the case if the judge agrees the deal allows too much market dominance and negotiating power, regardless of any actual consequences.
The outcome of the challenge will play a major part in shaping the future health insurance landscape, along with the similar challenge against a pending Aetna/Humana merger, as the deals famously have the potential to reduce the five top industry players (with the other being UnitedHealth) to just three.