US: In Antitrust trial, DoJ Questions Aetna-Humana asset sales

The Justice Department hammered away in court Thursday at the viability of a plan by Aetna and Humana to sell off assets to alleviate antitrust concerns about their proposed $34 billion merger.

The department, which is suing to block the merger, questioned the ability of the proposed asset buyer, California-based Molina Healthcare, to keep the market for private Medicare plans for senior citizens competitive if Aetna and Humana combine.

Currently the two large health insurers compete head-to-head in hundreds of counties for the sale of Medicare Advantage plans, which are government-backed alternatives to traditional Medicare.

Justice Department lawyer Ryan Kantor said Molina’s own documents showed that its board members had concerns about the wisdom of buying assets from Aetna and Humana.

Molina ultimately did so, agreeing to pay $117 million for assets representing about 290,000 Medicare Advantage enrollees in 21 states. Currently, Molina focuses largely on Medicaid, the government health-care program for the poor.

Mr. Kantor introduced as evidence several internal Molina documents as he questioned Molina Chief Financial Officer John Molina on the witness stand.

In one document, Mr. Molina wrote a memo to his board earlier this year in which he said Aetna was likely to keep its better-performing assets for itself while selling others to Molina. Mr. Molina in the memo also said his company didn’t have the same level of administrative manpower or experience as Aetna and Humana.

Full Content: The Wall Street Journal

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