If Aetna and Humana are allowed to merge, will the 17 million seniors in the Medicare Advantage market be left with too little choice and face higher prices for health insurance? That's the key issue in an antitrust trial on the proposed union set to begin in U.S. District Judge John Bates' courtroom Monday morning.
The Obama administration argues in its pre-trial brief that the $37 billion deal would create Medicare Advantage monopolies in 70 counties and increase market concentration in hundreds more across the country.
Aetna's attorneys counter that the private Medicare Advantage (MA) market competes with the traditional Medicare government program, so that seniors will continue to have choice.
Health department officials are "charged with ensuring that Original Medicare options and Medicare Advantage plans are and remain close functional substitutes for one another," Aetna's lawyers wrote in their brief.
Aetna and Humana also contend that their agreement to sell part of their combined business representing nearly 300,000 members to rival insurer Molina Healthcare will help maintain competition.
The government argues Molina, which specializes in the Medicaid program for the poor, has a poor track record in the Medicare market for seniors.
"Molina's previous attempts to market individual MA plans have been utter failures, and, despite having entered 63 counties since 2008, it is now left with only 424 individuals enrolled in individual MA plans in six counties in the entire United States," wrote lawyers for the antitrust division of the U.S. Department of Justice (DOJ).