But antitrust attorney Mark Rust said the companies could make a case that even if they became the dominant Medicare Advantage provider, it would still leave plenty of competition in the market because of the traditional Medicare option.
"Depending on how you define the market, Aetna-Humana may account for 25 percent of the market, or they may account for 5 percent… depending on how you define the product," said Rust, a managing partner at Barnes and Thornburg, who does not represent Aetna or Humana.
The companies have argued in their state insurance regulatory filings that traditional Medicare should be considered as a market alternative to Medicare Advantage. Two out of 3 Medicare enrollees still choose to enroll in the traditional plan.
However, in its 2012 complaint against Humana, DOJ officials dismissed that argument, saying Medicare Advantage and traditional Medicare are separate and distinct health plan products.
Analysts say the two options are structured quite differently. Medicare Advantage is more like the kind of private insurance plans most Americans get from employers.
"In a sense, it's one-stop shopping," said Gretchen Jacobson, associate director at the Kaiser Family Foundation. "You just have one plan."
Traditional Medicare, known as Part A, covers hospitalization costs. Beyond that, seniors pay a premium of $100 per month for medical coverage that pays for things like doctor visits, and they can buy a supplemental Medigap plan to help cover out-of-pocket expenses. They can also buy additional coverage for drugs, under Medicare Part D plans.
Researchers at the Kaiser Family Foundation say only about 5 percent of seniors switch from Medicare Advantage to the traditional option on an annual basis. Part of the reason may be Medicare rules that make it hard to switch.
"They may not be able to get a Medigap policy to help wrap around for their cost-sharing," said Jacobson. "The only time when you're absolutely guaranteed to get a Medigap policy is when you turn 65."
Under Medicare rules, seniors who don't enroll for supplemental plans when they're first eligible at age 65 can be denied coverage in some states for pre-existing health conditions.
Still, the DOJ's view on this issue has not been put to the test in court, said Rust. If federal regulators choose to sue Aetna and Humana to block the merger, the structure of the overall Medicare market could become a central argument.
"We don't have any cases on this yet, and it will all come down to the view of a federal judge, wearing his or her cap as an economist, basically," he said.
FBR's Halper still sees a 65 percent chance that the DOJ will reach a divesture agreement with Aetna and Humana to approve the deal. He and other analysts are less confident Anthem and Cigna will gain federal approval.
If the deals are blocked, Halper expects the companies will have to consider going to court to fight for approval. The Anthem-Cigna deal includes a $1.8 billion breakup fee if they don't. The Aetna-Humana agreement has a $1 billion breakup fee.
That said, he can also see an argument for just moving on.
"You've had four companies tied up in a regulatory process that has lasted a year," he said. "If I'm the CEO of those companies ... I need to get on with my life. I don't want to go another whole year through a regulatory process."
A DOJ spokesman declined to comment on the health insurer regulatory review. A spokesman for Aetna maintains that the company continues to cooperate with the DOJ.