Anthem and the U.S. Justice Department faced off in court Monday arguing over whether the insurer’s plans to buy Bloomfield-based Cigna threaten anti-trust issues.
The dispute centers around whether the $45 billion tie-up would concentrate the health insurance market and harm competition that would drive up prices for consumers.
Anthem’s attorneys told the U.S. District Court in Washington that as a larger entity it anticipates being able to negotiate lower prices for consumers. But DOJ lawyers said that sounded like it would force physicians and hospitals to work for less - describing that as "dropping the hammer on providers."
"Efficiencies don't count if the only way you get them is more market power," the Justice Department's attorney Jon Jacobs said in opening statements.
This first phase of the trial focuses on the merger’s potential effect on the national, employer-led market. A second phase, expected next month, will focus on local markets.
The deal has been under negotiation for well over a year at this point, and the two companies have often seemed at odds over its terms. If the deal fails, Anthem will be on the hook for a $1.8 billion dollar break-up fee.
The DOJ’s second anti-trust case, against Aetna and Humana, gets underway next month.
