- The pending Anthem-Cigna merger would cause major price hikes for nationwide employers, the U.S. Department of Justice argued Monday during the first phase of the antitrust trial over the merger, Reuters reports.
- In response, Anthem maintained the combined company would have the power to maintain costs and, according to Modern Healthcare, create new reimbursement methods.
- "The notion that these Fortune 500 companies are going to be victimized here...is not realistic," Christopher Curran, Anthem's legal representative, was quoted in Reuters.
The antitrust trial, which began Monday, attracted such a large crowd that two courtrooms were entirely packed, according to Modern Healthcare.
U.S. District Judge Amy Berman Jackson could make a final decision on the case during the first phase of the trial, which concerns national accounts. The second phase, centered on regional markets, is scheduled to begin in January. Jackson expects the case to be decided before January's end, Modern Healthcare noted.
If the $54 billion transaction is completed, Anthem would move to become the largest payer in the U.S. The DOJ has requested a "full stop injunction" of the merger and claims the merger is unlawful as it violates the Clayton Antitrust Act of 1914, which is aimed at preventing anti-competitive practices.
One of the most important issues at hand is how the commercial health insurance market is defined. The pretrial brief notes DOJ's complaint defines the market as “the sale of commercial health insurance to national accounts.” However, a counsel for Anthem says "there is no industry consensus for the meaning of the term 'national account,'” adding, since the company only sells commercial insurance in 14 states, it is just a regional insurer, not national.
The American Medical Association concurs with the DOJ's argument the completed merger would result in higher prices. "A merger between Anthem-Cigna would further diminish competition in 121 metropolitan areas located throughout the 14 states where Anthem is licensed to provide commercial coverage," President Dr. Andrew Gurman said in a statement. "Peer-reviewed evidence is now available indicating health insurer consolidation has resulted in higher premiums, instead of promised efficiencies and lower costs."
Aetna's $37 billion acquisition of Humana is also being challenged with an antitrust lawsuit from the DOJ and their trial is set to begin next month.