Aetna, Humana dispute DOJ's challenge to proposed merger

Companies say DOJ claims 'do not comport with reality'

Aetna and Humana defended their proposed merger in court documents filed Friday in response to the Department of Justice's (DOJ) legal challenge to the deal.

DOJ last month filed lawsuits challenging proposed mergers between Aetna and Humana, as well as Anthem and Cigna. If both deals are allowed to close, the nation's five largest health insurers would be consolidated into three companies.

The department in its lawsuit against the proposed Aetna-Humana deal expressed concern that it could negatively affect the Medicare Advantage (MA) and Affordable Care Act (ACA) exchange markets. The lawsuit is scheduled to go to trial on Dec. 5 and U.S. District Judge John Bates is expected to decide on the case in mid-January 2017.

Insurers dispute DOJ's arguments

In the filings, Aetna and Humana argued DOJ's claims that the proposed merger would have anti-competitive effects for MA and ACA markets "do not comport with reality," and that private insurers would fill competitive gaps in the markets.

The insurers wrote, "There is no basis for the plaintiffs' inference that entities currently selling [MA] products in a given county will forever stay the same." They continued, "Rather, the rich history of private insurers entering individual counties strongly supports the conclusion that new providers would enter individual geographies even assuming a hypothetical price increase."

Further, Aetna and Humana said MA was created to compete with traditional Medicare, which the insurers said limits the merger's anti-competitive effects on such plans. The companies also noted that they have agreed to sell MA plans to Molina Healthcare in the 364 counties DOJ said would be most harmed by the merger.

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Aetna and Humana also said DOJ's claims about the merger's potential effects on the exchange market are now moot because both companies plan to exit most exchange markets for the 2017 coverage year.

In addition, the insurers argued that the merger would bolster competition and help the companies offer lower-cost, value-based health plans more quickly than they could independently (Teichert, Modern Healthcare, 8/22; Ferowich, FierceHealthcare, 8/23).

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