Aetna CEO defends merger with Humana in antitrust trial
By Diane Bartz
WASHINGTON (Reuters) - Aetna Inc's (AET.N: Quote) chief executive denied on Friday that its withdrawal from some Obamacare exchanges was in retaliation for government efforts to halt its merger with Humana Inc (HUM.N: Quote), as he sought to convince a federal judge to approve the deal. The U.S. Justice Department sued to stop the $34 billion tie-up in July, saying that it and another insurance mega merger, Anthem Inc's (ANTM.N: Quote) planned purchase of Cigna Corp (CI.N: Quote), would mean higher prices and worse service for many consumers.
The primary disputes in Friday afternoon's testimony were whether traditional Medicare, which is managed by the government, competes with Medicare Advantage, run by insurers, and whether Aetna pulled out of some public Obamacare exchanges out of anger after the department filed its lawsuit.
Aetna's CEO Mark Bertolini said the decision was driven by the financial losses the company was incurring through the exchanges, established under President Barack Obama's signature healthcare law.
If Judge John Bates of the U.S. District Court for the District of Columbia agrees that the two types of Medicare compete, he will likely rule that there is sufficient competition in the market and allow the deal to go forward.
The government has shown that once a person signs up for Medicare Advantage, they tend not to shift to Medicare, a sign that the two do not compete.
Bertolini acknowledged that there were differences between the two programs in terms of cost, portability, types of service and size of provider networks. But he also said thousands of people become eligible every day to decide between Medicare and Medicare Advantage.
"We're really competing for the 11,000 people that retire every day," he told the court.
The government sued in July to prevent Aetna's purchase of Humana merger, on grounds that it violated antitrust law. Within weeks, Aetna said it would drop its Obamacare plans in 11 of the 15 states in which it was active. Continued...