The U.S. Department of Justice will begin efforts to block Anthem's proposed $54 billion purchase of Cigna in a Washington, D.C., federal district court today.
Here are five things to watch.
1. First-phase arguments will focus on the acquisition's effect on the national large employer insurer market, CNBC reports. Approval of the Anthem-Cigna deal would establish the nation's largest insurer per enrollment, with more than 54 million policyholders, an annual revenue of $117 billion and national market share of about 29 percent.
2. The DOJ will argue the deal will shrink the country's five nationwide insurers to four, impeding national insurance competition and raising antitrust concerns in at least 35 markets. Healthcare antitrust lawsuits often focus on local markets, and Thomas Greaney, co-director of the center for health law studies at Saint Louis University School of Law, told CNBC, "There really is not a well-defined market for national employers, and there hasn't been a case yet brought by the justice department that alleged such a market."
3. Indianapolis-based Anthem and Bloomfield, Conn.-based Cigna will argue their combined entity would lower overhead costs. The payers will also argue their large scale would give them negotiating power over hospitals and physicians, lowering prices for policyholders.
4. The insurers will need to prove their efficiency as one entity, as the government will argue the fact that each insurer accused the other in September of breaching their acquisition agreement shows the two cannot work together. Federal attorneys will call Anthem CEO Joseph Swedish as their first witness to address the accusations, CNBC reports.
5. Presiding U.S. District Judge Amy Berman Jackson said there will be a ruling on the case in January. Anthem said its acquisition of Cigna will need to be complete by April 30, or Cigna will walk out the next day and collect a $1.85 billion breakup fee. In addition, Anthem said even if it receives a positive court ruling, it will still need at least 120 days to garner approval from all state regulators.