The deep rift between merging health insurance companies Cigna Corp. and Anthem Inc. came further into public view Tuesday when transcripts of testimony from both companies’ chief executives were unsealed during a U.S. antitrust trial in Washington.

Cigna CEO David Cordani, who has publicly defended the plan, revealed his doubts about whether the merger will benefit his company under questioning by the Justice Department, which has sued to block the deal. And Anthem CEO Joseph Swedish disclosed that his company had created a secret team to plan its integration while keeping Cigna executives in the dark because of their lack of cooperation.

Both executives testified in a closed courtroom Nov. 22. Their testimony was unsealed Monday and released Tuesday.

Cordani told U.S. District Judge Amy Berman Jackson that his company stopped work on the $48 billion merger when faced with the Justice Department’s July lawsuit. By that time his company was already confronting an Anthem integration and rebranding strategy called “Bias Blue,” which in his view would weaken Cigna by shifting members to the Blue Cross Blue Shield Association, a network of insurers that includes Anthem.

Those concerns were outlined in a letter included in the transcript from Cigna general counsel Nicole Jones to Anthem general counsel Tom Zielinski.

“Your approach to the regulatory strategy, when coupled with your approach to integration and other matters, appear to be designed to cause commercial harm to Cigna while simultaneously strengthening your fellow Blues,” Jones wrote.

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The clash between the two executives undercuts one of Anthem’s key arguments in favor of the deal: that combining with Cigna will lead to more efficient operations, which will lower costs for customers. The government counters that the hostility between the two will prevent them from successfully integrating.

At stake is the $1.85 billion breakup fee that Anthem must pay Cigna if the deal is blocked on antitrust grounds. Anthem won’t have to pay if it proves Cigna committed a “willful breach” of the agreement.

When asked about a newspaper advertisement placed by Anthem the day after the U.S. lawsuit, which said the merger would bring greater benefits and choice to consumers, Cordani said he disagreed because in his view the deal would narrow consumer choice by weakening Cigna offerings.

Cordani also rejected Anthem’s estimate that the merger could generate some $2 billion in savings for self-insured employer customers because the analysis was only focused on opportunities to generate discounts.

“We view that it is, at best, incomplete and, therefore, inaccurate,” Cordani said.

In his testimony, Swedish conceded that his company had created a team to plan the insurers’ integration but kept it secret from Cigna, prompting the judge to ask him, “How do you work on integration without talking to the person you’re integrating with?”

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“Very good question,” Anthem’s CEO responded, explaining that the move was prompted by Cigna’s decision to stop work on the merger.

“We wanted to proceed and they didn’t want it, and so we decided to continue, knowing that they would come back in when the time was right for them,” Swedish said, according to the transcript.

Spokesmen for both companies declined to comment on the unsealed testimony.

Citing too much concentration in the health insurance market, the Justice Department has also sued to stop Aetna Inc. from combining with Humana Inc. That Washington federal court trial starts before a different judge next Monday.


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