Morgan Kendrick, Anthem’s president of national accounts, testified that the plan’s $48 billion proposed merger with Cigna will not undermine competition, as the Justice Department argues in the antitrust suit it brought against the merger. That’s because, Kendrick said Tuesday, the merger will allow the new company to compete against plans that are part of the Blue Cross and Blue Shield Association. Kendrick pointed out that Anthem is now part of the Blues association and therefore currently cannot compete against its sister plans, according to Bloomberg News.
The Anthem-Cigna deal, together with Aetna’s proposed $34 billion acquisition of Humana would reduce the five major insurers into three—unprecedented consolidation.
Anthem’s economics expert, Lona Fowdur, also testified that the merger would not adversely affect competition, pointing to the clout of regional insurers and the tendency of employers to split their business among different health plans.
U.S. District Judge Amy Berman Jackson asked if the smaller companies can truly compete against the bigger insurers. “From everything that we’re seeing here, there’s enough choice, there’s enough dynamism in this marketplace,” Fowdur responded, according to Bloomberg News. “That choice is, in fact, expanding rather than shrinking.”
Source: Bloomberg News