The Justice Department put a top Molina executive on the hot seat Thursday as it sought to erode Aetna and Humana’s argument that a divestiture of Medicare Advantage assets will ease concerns about the anticompetitive effects of their deal.
The antitrust trial to decide the fate of Aetna’s acquisition of Humana began this week with both sides making their case for how the deal could affect both the Medicare Advantage market and the individual market. The insurers, which currently compete in many private Medicare markets, have agreed to divest $117 million worth of MA assets to Molina if the deal closes.
But as he questioned Molina CFO John Molina on Thursday, DOJ lawyer Ryan Kantor presented evidence that leaders at Molina were hesitant at first to agree to the deal with Aetna and Humana, The Wall Street Journal reports. In one email exchange, Molina board member Dale Wolf said the company—which primarily focuses on Medicaid managed care—is “woefully under-resourced” to handle the divested assets.
The documents also show that Molina himself worried that Aetna and Humana would choose to sell their lower-performing assets, saying the company should only agree to the deal if it gets a bargain, according to the article.
But Molina testified that not only did the company indeed get a good price, but he also believes the purchase will be beneficial by diversifying the insurer’s assets. The smaller insurer plans to make the necessary investments to ensure the deal is successful, he added.
The DOJ has argued that Aetna and Humana’s divestiture proposal isn’t enough to fix the anticompetitive threat of their deal, saying smaller plans lack the critical star ratings and branding necessary to succeed. But Aetna CEO Mark Bertolini has said the company is “confident in Molina’s ability to deliver continued access to quality care for our members in these areas,” FierceHealthPayer reported.