Aetna and Humana fought back against the U.S. Justice Department's challenge to their proposed $37 billion merger, saying the feds' arguments ignore the fluid nature of Medicare Advantage markets.
The two insurers criticized the government's claims that their proposed consolidation would have anti-competitive effects for Medicare Advantage and Affordable Care Act markets, with Aetna saying the allegations “do not comport with reality.” While the government portrayed the healthcare markets as static and rigid, Aetna and Humana said private insurers would fill any competitive holes left in the marketplaces.
“There is no basis for the plaintiffs' inference that entities currently selling Medicare Advantage products in a given county will forever stay the same,” the insurers said. “Rather, the rich history of private insurers entering individual counties strongly supports the conclusion that new providers would enter individual geographies even assuming a hypothetical price increase.”
In their answers to DOJ's complaint on Friday, Aetna and Humana noted that Medicare Advantage was created to compete with the government's original Medicare offerings, which, they argue, limits any anti-competitive effect the merger could have on those insurance plans.
Aetna and Humana also said they have a definitive agreement to sell Medicare Advantage plans to Molina Healthcare in the 364 counties that DOJ said could be most harmed by the merger.
Both companies maintain that their merger will have pro-competitive benefits for customers, despite the “dire consequences” predicted by the DOJ, telling the federal court it will help them turn toward lower-cost, value-based care more quickly than the insurers could do without the consolidation.
“The plaintiffs' static view of healthcare marketplaces is based on concentration presumptions that fail to account for commercial realities in the rapidly changing healthcare industry,” Aetna said in its filing.
DOJ's complaint had also attacked the mergers for potential anti-competitive effects on ACA marketplaces. But the insurers said those concerns are now moot, since both Humana and Aetna plan on withdrawing from most ACA marketplaces due to financial losses.
“Instead of accounting for the divestiture's impact on competition, the plaintiffs' complaint prejudged the agreement—without even seeing it,” Aetna said.
