In his turn on the witness stand in the Aetna-Humana antitrust trial, Aetna CEO Mark Bertolini sparred with Justice Department lawyers about the central debates surrounding the acquisition—including whether the deal will deliver on its promised efficiencies.
Bertolini testified Monday that Aetna's initial estimate was that the merger would create $1.25 billion in efficiencies, and it has since updated that estimate to $3 billion, Reuters reported.
But DOJ lawyer Craig Conrath challenged him on that, noting that Aetna’s own estimates of the transition cost would eat into some of the efficiencies. And Aetna never finished fully integrating its systems with Conventry, which it acquired in 2013, he added.
The Justice Department sued to block the Aetna-Humana deal, as well as Anthem’s acquisition of Cigna, in July, saying both would unlawfully reduce competition in key health insurance markets.
Addressing another key sticking point in the trial, Bertolini and other Aetna executives who took the stand this week reiterated the company’s claim that its decision to exit Affordable Care Act exchanges in 11 states in 2017 had nothing to do with the DOJ’s antitrust lawsuit, the Wall Street Journal reported.
Mounting financial losses—which could reach $350 million for 2016—in that business line was the real reason Aetna pulled back from the exchanges, Bertolini testified. Yet the DOJ pointed to internal communications in which Aetna officials talked specifically about how to handle the 17 counties identified in the lawsuit where Aetna and Humana currently compete, according to the WSJ.
Bertolini also argued that despite the DOJ’s assertions, Molina is capable of successfully taking over business operations for the MA assets Aetna and Humana plan to divest if their deal closes. The government challenged a Molina executive on that point last week, arguing the company’s own executives have had their doubts about the divestiture.