The U.S. Department of Justice began its antitrust challenge to Aetna's proposed $37 billion takeover of Humana Dec. 5, arguing the deal would limit competition between the insurers' Medicare Advantage and ACA public exchange plans, Louisville Business First reports.
The DOJ's opening arguments in a Washington, D.C., federal court were answered by Aetna lawyer John Majoras, who said the government's argument regarding ACA exchange competition addressed "a pretend world, one that does not exist anymore," according to the report. Mr. Majoras said insurers have been exiting the exchanges as they incur steep financial losses.
The government's case also hinges on antitrust arguments over a combined Aetna-Humana Medicare Advantage market share, which the DOJ says would limit seniors' choice in more than 350 counties, according to The Wall Street Journal. Justice Department lawyer Craig Conrath told U.S. District Judge John Bates competition between the payers for Medicare Advantage plans is "critically important," according to the report.
Mr. Conrath said the insurers' plan to divest more than $100 million in Medicare Advantage assets to Long Beach, Calif.-based Molina Healthcare is not enough to address antitrust concerns. An internal Aetna document presented by the DOJ in court said Humana is Aetna's "most formidable competitor" in the Medicare market, reports Bloomberg Law. The document, written by the head of Aetna's Medicare division Nancy Cocozza, said Aetna "compete[s] with [Humana] everywhere and they have momentum."
Aetna and Humana argue the proposed acquisition will not impede competition in the Medicare Advantage or ACA plan markets, saying the Medicare market extends farther than the government defines it. The insurers' lawyers also argue a combined Aetna-Humana company would streamline business, cut costs and provide better products.
Louisville, Ky.-based Humana and Hartford, Conn.-based Aetna saw stocks dip 2.2 percent and 3 percent, respectively, after the trial began Dec. 5.
Trial proceedings are expected to last through Dec. 30.