The election won't matter for health insurance merger trials

November 10, 2016

As millions contemplate the meaning of the election of Donald Trump as our 45th President, some might speculate this may lead to the demise of the Justice Department’s challenges to the Aetna-Humana and Anthem-Cigna mergers.  They could not be more wrong.

 

First, federal antitrust litigation is clearly a nonpartisan sport.  Though the officials who run the DOJ are political appointees, the folks who work in the trenches, the talented trial lawyers and economists, are professional civil servants and non-political, as are the two federal judges who will try and ultimately decide these cases (One is a Bush appointee and the other Obama).

 

Second, antitrust is built on a wide bipartisan consensus to respect the crucial role of the law to protect competition and the marketplace.  Those are bedrock concepts that both Republicans and Democrats agree with.  Nothing could be more corrosive for that bipartisan consensus than if the Trump Administration abruptly changed course in these vital cases.

 

Third, there is no reason to believe that a Trump DOJ will not see the critical value of these cases.  Indeed, when Trump spoke about health insurance he often emphasized the importance of increasing competition in these markets by eliminating regulatory restrictions preventing firms from entering into each other’s markets.  These mergers would be even more harmful than those restrictions in extinguishing competition.

 

Finally, mainstream Republican antitrust enforcers support these cases.  Former California Republican Congressman and Reagan-era FTC competition bureau director Tom Campbell was outspoken on his opposition to the mergers, stating in an op-ed, “Free-market advocates normally hesitate to second-guess market decisions, but not where a player in the market already shows monopoly power, or where a group of players agrees to offer identical terms and prices. Breaking up the Standard Oil Trust a century ago did not constrain competition but restored it.”

 

Donald Trump appreciates the simple hard facts that drives the economy.  And the simple facts here are clear – every past health insurance merger has lead to higher premiums and few if any benefits for consumers.

 

These were cases Reagan-era enforcers can support. We should expect the same from Donald Trump’s DOJ.

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