Aetna-Humana trial begins with debate over Medicare Advantage, ACA exchange competition

Witness stand in courtroom
Opening arguments began Tuesday in the antitrust trial that will decide the fate of the Aetna-Humana deal. Image: Getty/aerogondo

Opening arguments began Tuesday in the antitrust trial that will decide the fate of the Aetna-Humana deal, with opposing sides at odds over how the acquisition will affect two key markets. 

The Justice Department sued to block the deal—as well as the Anthem-Cigna merger—in July, saying that if allowed to proceed, the deals would “fundamentally reshape the health insurance industry” and significantly constrict competition. Anthem and Cigna’s trial began Nov. 21.

DOJ lawyer Craig Conrath opened the Aetna-Humana trial by saying the deal would erase competition in more than 350 counties where the two insurers compete to sell Medicare Advantage plans, according to the Wall Street Journal. He reiterated the government’s argument that traditional Medicare doesn’t compete with Medicare Advantage and that the insurers’ proposed divestiture to Molina is not a satisfactory fix for competition concerns.

But Aetna lawyer John Majoras countered that not only do traditional Medicare and MA compete, but there also could be even more competition given that new entrants to the MA market are common and widespread, Reuters reported.

He added that Molina is perfectly capable of being a competitor in the MA space, saying “this isn’t some feeble company, as the government would like to present,” according to the WSJ.

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Another point of contention between the two sides was the effect the Aetna-Humana merger would have on the Affordable Care Act exchange market. While Aetna plans to withdraw in 2017 from most of the ACA marketplaces where it had operated, Conrath contended that the company could re-enter those markets after next year, according to Reuters.

Aetna CEO Mark Bertolini, though, has said the insurer will likely not re-enter the marketplaces until at least 2019.

Conrath also cited written communications that showed Aetna pulled back from the exchanges because of the antitrust lawsuit against it, but Majoras said the company’s move was simply a result of mounting losses, according to Reuters.

"Humana's losses were actually even a bit worse," he added.