U.S. District Judge John Bates will begin hearing testimonies from Aetna and Humana Dec. 5 as they defend their $37 billion acquisition agreement against a Justice Department antitrust lawsuit.
Here are five things to know.
1. Hartford, Conn.-based Aetna warned the DOJ in a July 5 letter it would reduce its 2017 ACA exchange footprint if the DOJ sued to enjoin its acquisition of Louisville, Ky.-based Humana. On July 21, attorneys general from several states and the DOJ sued the payers over concerns their deal would hamper competition. Aetna's threat materialized August 15 when the insurer said it would pull out of 11 of its 15 state ACA exchanges next year.
2. The Aetna-Humana deal would result in the largest Medicare Advantage plan seller, and the combined insurer would be the only market competitor in 70 counties, the DOJ argues. In its defense, Aetna CEO Mark Bertolini said the insurer will argue the DOJ's defined Medicare Advantage market — which hones in on a county-by-county analysis of where the two insurers have large market shares — is too narrow.
3. The insurers agreed in August to sell certain Medicare Advantage assets to Long Beach, Calif.-based Molina Healthcare for an estimated combined $117 million in every county highlighted in the DOJ's antitrust defense. Mr. Bertolini and Humana CEO Bruce Broussard believe their agreements adequately address antitrust concerns.
4. The payers extended the deadline of their acquisition agreement from June 30 to Dec. 31, and requested a quick turnaround on the trial, citing the looming deadline. Under the merger contract, Humana could walk out and collect a $1 billion break up fee from Aetna if the deal does not close by Dec. 31. In addition, DOJ and state insurance regulator approval is required for the deal to pass. Aetna gained approval from 18 of 20 states where regulatory sign-off is required.
5. Trial proceedings will begin next Monday in Washington, D.C.