Anthem has every intention of fighting in court for its merger with Cigna, according to CEO Joseph Swedish, and one of the main facets of its argument appears to be the deal’s potential benefits for the public exchange market.
The Justice Department sued to block both the Anthem-Cigna deal and the Aetna-Humana merger last week, citing a slew of antitrust concerns.
“To be clear, our board and executive leadership team at Anthem is fully committed to challenging the DOJ’s decision in court,” Swedish said Wednesday in the company’s second-quarter earnings call.
Anthem is anticipating a four-month trial, Swedish said in an interview with CNBC, noting that he does not yet know when proceedings will begin, but is hoping for a speedy trial. And though some experts have been doubtful about its chances to win the case, “we believe once the facts are presented, we will prevail,” Swedish said.
Anthem CEO Joe Swedish explains why his company is fighting the DOJ to preserve its deal to buy Cigna. https://t.co/E985qhCSte
— David Faber (@davidfaber) July 26, 2016
The core of Anthem’s argument is that “the decision blocks access to consumers to affordable healthcare that’s high-quality,” Swedish told CNBC. This is especially true for the often-vulnerable population served by the public exchanges, he contended.
Through its Blue Cross Blue Shield branded plans, Anthem is one of the largest players in the Affordable Care Act-created marketplaces, with more than 900,000 enrollees across 14 states as of the end of Q2, he told shareholders on the quarterly earnings call.
Not only would a combined Anthem-Cigna “help stabilize pricing in this volatile market,” it would expand to nine additional state markets in which neither company currently participates, potentially bringing in as many as a million new enrollees, he said.
“I think that’s of great value to the marketplace and to the American public,” Swedish told CNBC.
In its complaint against the Anthem-Cigna merger, however, the DOJ has argued that the deal will damage competition on the public exchanges. In St. Louis and Denver, for example, the two companies are “key competitors” selling individual and family policies on the exchanges, it says, adding that both companies have indicated independently that they intend to expand their exchange presence.
- listen to the earnings call
- here’s the first CNBC video
- watch the second video
- check out the complaint against Anthem