The broad strokes of each side's arguments, as revealed in pre-trial briefs filed in federal court late last week, show two sides that don't even agree on basic facts.
Anthem says the DOJ is conflating two distinct markets for large commercial accounts. One is the more common arrangement, where companies like Coca-Cola self-insure, and just hire someone like Anthem or
The other national account arrangement is where a few giant employers let an insurer like Aetna predict how much health care employees will need, and quote a price based on that.
The antitrust regulators wrote in their brief that they "are not required to show that Anthem will increase prices, decrease provider reimbursement, or cause the quality of medical care to diminish." Instead, they said, if the merger increases market share for the combined company in an already concentrated market, the presumption the judge should draw is that it's illegal.
Anthem argues that the government's argument that a larger Anthem will contain costs at health care providers is proof that the merger is good for consumers. It says that the Coca-Colas of the world, since they pay the health care bills directly, will be the beneficiaries of lower reimbursement rates negotiated by Anthem.
"This is an extraordinary action in which federal and state competition authorities, are, according to their own allegations, seeking to deprive American consumers of lower health care costs," Anthem's lawyers wrote.
And, Anthem says, the government ignores the fact that Anthem is not a national insurer now, with a national network. It is a regional insurer, with operations in 14 states, and when national employers want to provide health insurance to employees outside those states, Anthem rents health care networks for a fee from non-profit
"A prime reason for the proposed merger is to provide Anthem with Cigna's nationwide network so that Anthem may for the first time become a true nationwide competitor," Anthem lawyers wrote.
"At trial, Anthem will establish that customers do not consider Cigna to be the closest substitute for Anthem; in fact, Anthem's closest competitor is
They said the fact that employers can choose from a true national network like Aetna's, or a regional player who rents networks from others shows that even becoming larger would not guarantee that Anthem would have monopoly pricing power when selling to companies with national employee footprints.
They said the case ignores that "the most sophisticated and resourceful commercial enterprises in the world would have a multitude of options to defeat any attempted price increase by the hypothetical monopolist.
"The complaint seems to assume that the nation's biggest corporations would meekly submit to an attempted price increase by nationwide-network insurers. Evidence and reason suggest otherwise."
The government lawyers argued that even if the judge disagrees that Anthem would have the ability to charge more without losing customers, she should still block the merger because the law also bars monopoly power that applies to what companies buy -- in this case, medical services the end customers receive.
They said they only have to prove that Anthem's bargaining leverage will increase. Their side does not have to "take the extra step of proving that ... lower rates will restrict access to medical care, reduce the quality of medical care, or otherwise harm patients."
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