By: James F. Peltz
1/23/2017
LA Time
The proposed $34-billion merger of Aetna Inc. and Humana Inc. to form one of the nation’s largest health insurers was blocked Monday by a federal judge on antitrust grounds.
The ruling by U.S. District Judge John Bates in the District of Columbia was a victory for the Justice Department, which under the Obama administration sued to stop the deal.
In his decision, Bates agreed with the agency’s assertion that the deal would threaten competition, especially in the market for seniors who buy privately operated Medicare health plans called Medicare Advantage.
“Federal regulation would likely be insufficient to prevent the merged firm from raising prices or reducing benefits,” and there is “valuable head-to-head competition between Aetna and Humana which the merger would eliminate,” Bates wrote.
His decision raises questions about whether another huge health-insurance merger, Anthem Inc.’s proposed $48-billion purchase of Cigna Corp., might be in peril as well. The Justice Department also sued to block that deal for antitrust reasons; the case is being heard by a different judge.