Anthem-Cigna merger awaits ruling from judge

The first phase of the Justice Department's lawsuit to halt Anthem's planned takeover of rival insurer Cigna is in the hands of a federal judge after the government wrapped up its arguments Tuesday that the deal would harm competition in the national insurance market.

U.S. District Judge Amy Berman Jackson in Washington, D.C., will issue her decision on whether the combination of the companies risks higher costs for large employers nationwide and should be blocked. She didn't say when she would rule.

Anthem is the parent company of Amerigroup Iowa, one of the three managed-care organizations that handle Iowa's Medicaid program.

During Tuesday's session, Jackson questioned lawyers for Anthem and the Justice Department on their arguments about the competitive effects of the $48 billion deal. She said Anthem's calculations related to market-share data for competitors were 'distressing.”

In what are expected to be the final major antitrust cases of the Obama administration, the Justice Department sued Humana and Aetna in July, the same day it filed a complaint seeking to halt Anthem's acquisition of Cigna.

The antitrust lawsuits are aimed at preventing concentration among the biggest U.S. health insurers and protect competition in an industry that President Barack Obama reshaped with the 2010 Affordable Care Act.

The first phase of the trial focused on the national market where Anthem and Cigna compete. The government said the deal would leave just three insurers in the United States that can offer a nationwide commercial insurance network to the country's biggest employers.

Anthem and Cigna compete aggressively to win these accounts and their combination would eliminate Cigna as a competitive force, according to the government.

Central to the dispute is how the deal would affect doctors and hospitals. Anthem, based in Indianapolis, Ind., argues that the acquisition of Cigna, based in Bloomfield, Conn., would give it the ability to lower reimbursement rates to health providers and that those savings would be passed on to employers.

The government counters that's just another exercise of market power that violates antitrust law.

A decision by Jackson in favor of the government on the first phase of the trial would block the merger and make the second phase moot.