Judge sides with DOJ, blocks $37B Aetna-Humana merger

Jan. 23 (UPI) — A federal judge on Monday decided that a megamerger between insurance giants Aetna and Humana would likely cause more harm than good — at least from the patient’s perspective.

The proposed merger, announced 18 months ago, would have combined two of the United States’ largest insurers. Aetna announced it would acquire Humana in July 2015 for about $37 billion in cash and stock.

The plan, though, has languished for months while seeking federal approval. The U.S. Department of Justice filed a lawsuit to block the merger last year, believing it would stifle competitors. The trial began earlier this month.

Government attorneys argued that such a merger would probably harm seniors who buy private Medicare insurance and some Americans who buy their coverage through Affordable Care Act exchanges.

“In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges,” U.S. District Judge John D. Bates wrote in a 156-page ruling. “After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the Court mostly agrees.”

Aetna and Humana said the merger would combine their strengths and result in more cost-effective service.

The insurance companies could appeal Monday’s decision.

“We’re reviewing the opinion now and giving serious consideration to an appeal after putting forward a compelling case,” Aetna spokesman T.J. Crawford said.

The rejection of the deal is a victory for the former Obama administration, which also filed a suit to stop a merger between Anthem and Cigna. A decision in that case is also expected soon.

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