The defendants, Anthem and Cigna, argue that their proposed merger will help the new company provide lower rates to providers and that those savings will be passed on to employers. Good. The plaintiff, the U.S. Justice Department, argues that the merger should be blocked because it gives the two companies unfair market dominance and would limit consumer choice. Bad.
That was the gist of opening statements made yesterday in the government’s lawsuit to block the Anthem-Cigna merger on antitrust grounds, according to the CT Mirror. The Justice Department, in the first phase of the trial, will try to prove that the $54 billion merger will hurt large national employers. The second phase is scheduled to begin December 12, and will focus on the merger’s effects on health care marketplaces.
Anthem’s attorney Christopher Curran said that “many of the Justice Department’s concerns about the commercial insurance market were misguided because most large companies self-insure, relying on insurers only for administrative services like adjusting and paying claims and providing a network of providers.”
Justice Department attorney Jon Jacobs countered: “The more concentrated the market, the more likely you will have higher prices, lower quality, reduced consumer choice and less innovation.”
Source: CT Mirror