A watchdog group led by former Obama administration lawyers is calling for an investigation into whether the White House is trying to interfere with the Justice Department's decision to block the merger of health insurance giants Anthem and Cigna.
“We are concerned that Administration officials may have engaged in inappropriate conduct regarding the Anthem-Cigna litigation,” Ian Bassin, the executive director of United to Protect Democracy, wrote in the letter to Michael Horowitz, the inspector general for the Justice Department. “Were the White House to engage in any contacts with DOJ about this ongoing antitrust enforcement matter, it would substantially undermine Americans’ confidence in the Department’s commitment to equal justice under law.”
Bassin's group has no evidence of any improper action, but noted in its letter that Anthem chief executive Joseph Swedish talked with President Trump on the phone last week and that a former Anthem lobbyist, Makan Delrahim, works as a senior official in the White House Counsel's Office and reportedly is Trump's pick to head the antitrust division at the Justice Department.
A White House spokesperson dismissed the letter's concerns as baseless, noting that Trump spoke with Swedish about health care reform. The spokesperson said the White House took precautions to ensure that neither the merger nor any related litigation was discussed. She added that Delrahim has not been involved in the Anthem-Cigna merger since joining the White House and has recused himself from any involvement in the matter.
“The letter provides no information to suggest that the White House’s policy was not followed as to the Anthem-Cigna merger or related litigation, or that there has been any improper communication between the White House and the Department of Justice regarding these issues,” said the spokesperson, who was not authorized to speak on the record.
An Anthem spokeswoman and a Cigna spokesman declined to comment.
The merger effort has been a long and involved saga. Last summer, the Justice Department blocked the $54 billion deal on antitrust grounds, saying the merger would harm competition, and a federal judge upheld the decision last month. Cigna sued Anthem, seeking $14.8 billion and the termination of the merger agreement. Anthem has filed its own suit against Cigna. In a research note to investors, Leerink Partners analyst Ana Gupte said that litigation is centered around the payment of a $1.85 billion breakup fee.
Separately, Anthem is appealing the judge's decision — an effort Gupte suggested was not likely to succeed. But in a Delaware Chancery Court proceeding, an attorney for Anthem argued the deal could still go through in a "resolution with a new DOJ," referring to new leadership at the Justice Department.
Glenn Kurtz, an attorney for Anthem, argued in February that the merger could now go through because Vice President Pence had supported the deal when he was governor of Indiana. Kurtz added that Anthem would offer insurance coverage in nine new states through the Affordable Care Act's marketplaces, which could be desirable since other insurers were pulling out.
In a similar antitrust case, a judge's opinion revealed that participation in the marketplaces had been part of the insurer Aetna's strategy to persuade the government to support its case. Aetna ultimately pulled out of some marketplaces where it was making money in an effort to get its deal approved by regulators, according to the judge.
Anthem has been supportive of the Republican effort to repeal and replace the Affordable Care Act, during a time when much of the direct response to the health-care bill from industry leaders was negative. Swedish wrote a letter to Republican lawmakers saying the bill “addresses the challenges immediately facing the individual market and will ensure more affordable health plan choices for consumers in the short term,” adding that, “The time to act is now.”
Shortly after sending that letter, Swedish spoke with Trump and Secretary of Health and Human Services Tom Price on the phone.
The call was focused on the Republican health care bill and some of the provisions the company thought were important such as the elimination of taxes, chief financial officer John E. Gallina said in remarks at the Barclays Global Health Care Conference.
“And we feel very good, very encouraged by the fact that the president and his team are listening and actually making changes based on feedback that the industry is providing. So we're very encouraged,” Gallina said.
Bassin argues that the matter should be investigated: “We cannot help but suspect that this matter may have arisen during discussions between the White House and Justice Department about the potential nomination of Mr. Delrahim,” Bassin wrote.
The Justice Department did not respond to a request for comment.