Division Simultaneously Presents Two Major Health Insurance Merger Trials

Division Update Spring 2017

Four separate health insurance companies remain that way following two trial wins by the Division in the U.S. District Court for the District of Columbia this year.

It all began in the summer of 2015 when, following months of backroom discussions about possible combinations, Aetna announced that it would acquire Humana and Anthem announced that it would acquire Cigna. These deals had the potential to fundamentally reshape the health insurance landscape.

Over the course of a year, the Division and state attorneys general jointly investigated the Aetna-Humana and Anthem-Cigna mergers. The joint investigation culminated in a decision to pursue simultaneous enforcement actions to block both deals on July 21, 2016. Eight states and the District of Columbia joined the complaint against Aetna and Humana and eleven states and the District of Columbia joined the complaint against Anthem and Cigna.



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The Aetna-Humana complaint alleged harm to competition in two distinct product areas: Medicare Advantage (MA) sold to individual seniors in 364 counties across the United States, and commercial health insurance sold to individuals and families on the public exchanges created by the Affordable Care Act in 17 counties in Florida, Georgia, and Missouri. Judge John Bates set a highly accelerated five-month trial schedule, culminating in a 13-day bench trial in December 2016. The court heard testimony from 31 live witnesses, admitted over 1,200 trial exhibits, and received 350 pages of post-trial briefing.

Medicare Advantage

The proposed merger would have eliminated significant competition between Aetna and Humana, two of the largest competitors in the MA industry. Aetna’s and Humana’s ordinary course business documents detailed their intense rivalry. Just three months before the merger was announced, Aetna’s head of Medicare Advantage described Humana as Aetna’s “most formidable competitor,” stating that “[w]e compete with them everywhere and they have momentum.” Moreover, Aetna is a highly aggressive MA competitor and has been expanding rapidly. Over the last four years, Aetna expanded into 640 new counties, more than twice as many as any other insurer.

By eliminating this significant competition between Aetna and Humana, the proposed merger would have caused seniors to pay higher premiums and receive reduced benefits, resulting in hundreds of millions of dollars in harm to consumers and taxpayers.

Individual Commercial Insurance

Aetna’s proposed merger with Humana also threatened to harm those individuals and families who rely on the public exchanges to buy health insurance, particularly in Florida, Georgia, and Missouri. Aetna and Humana controlled a significant portion of these markets, and direct competition between them had benefitted consumers and taxpayers.

On January 23, 2017, Judge Bates issued a 158-page opinion enjoining the merger. He found that the deal would violate Section 7 of the Clayton Act in all 364 Medicare Advantage markets, and in individual commercial insurance sold on three public exchange markets in Florida. On February 14, 2017, Aetna and Humana formally abandoned their proposed merger.



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The Division’s complaint seeking to block Anthem’s $54 billion acquisition of Cigna alleged that a combined Anthem and Cigna would substantially lessen competition in the health insurance industry in dozens of markets across the country. The Division tried the case before Judge Amy Berman Jackson from November 21, 2016 to January 3, 2017. The parties presented 28 fact witnesses, five experts, and deposition excerpts from more than 100 individuals.

On February 8, 2017, Judge Jackson ruled in favor of the Division and blocked the proposed merger. She found that the merger was likely to substantially lessen competition in the market for the sale of medical health insurance to national accounts in fourteen states and in the sale of medical insurance to large group employers in Richmond, Virginia. The matter is currently on appeal before the U.S. Court of Appeals for the District of Columbia Circuit.

Updated March 28, 2017

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