Justice Department Modifies Anthem-Cigna Lawsuit

Sept. 28--The U.S. Department of Justice has agreed to drop the plank of its antitrust case that alleges that the proposed $48 billion purchase of Cigna by Anthem would hurt competition in the individual health insurance market on Obamacare's exchanges.

The antitrust regulators sued in July to stop the deal and another in which Hartford-based Aetna would purchase Humana, arguing that limited health care competition would increase costs for consumers, doctors and hospitals.

The department, however, wrote in a letter dated at the end of August that it would no longer purse the Obamacare complaint. The letter was filed in federal court in Washington, D.C., Tuesday afternoon.

The antitrust regulators "enter into this stipulation in an effort to narrow the issues for trial," the document says. They "will continue to challenge the proposed merger between Anthem and Cigna on the grounds that it substantially lessens competition in the markets for the sale of commercial health insurance to national accounts, to large-group accounts in the 35 local markets listed in the complaint, and in the market for the purchase of healthcare services in those same 35 local markets."

The government says large employers will have fewer choices if the two companies merge, and Cigna's innovative options will be lost. It also says that Anthem will use its augmented market power to drive harder bargains with doctors and hospitals -- the market for the purchase of health care services mentioned in the letter.

Cigna plans to sell Obamacare plans for 2017 in Boulder, Colorado Springs and Denver, Colo; Chicago; St. Louis and Kansas City, Mo.; Raleigh, N.C.; Nashville, Memphis and Bristol, Tenn.; northern Virginia and Richmond, Va.; and in Maryland.

Anthem sells on the exchange in Connecticut, California, Colorado, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New York, New Hampshire, Ohio, Virginia and Wisconsin.

The Department of Justice said it was not waiving its right to pursue allegations about the effect of the merger on Obamacare -- officially known as the Affordable Care Act -- markets in any other litigation or administrative proceeding outside of this case.

This trial is scheduled to begin in late November.

Anthem and Cigna declined to comment.

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