Aetna - Humana Merger Blocked By A U.S. federal judge John Bates
Afederal judge Monday at least temporarily blocked the proposed $37 billion mega- merger between health insurance industry giants Aetna and Humana, ruling that the transaction would reduce competition for consumers.
Although the decision can be appealed, the outcome could have significant ramifications on how U.S. seniors purchase Medicare health insurance coverage, as well as on insurance options available to individuals who don't have employer coverage.
"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 Court Judge John Bates wrote in his 156-page ruling. "After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the Court mostly agrees."
The judge based his decision enjoining the merger on evidence of "overwhelming market concentration figures" the merger would generate, plus head-to-head competition between Aetna and Humana that would be eliminated if the deal were finalized.
Aetna, Humana face federal antitrust lawyers in court
The companies contended their complementary strengths in technology and relationships with health care providers would benefit consumers. But Bates' ruling called the arguments "unpersuasive," and concluded that federal regulation would be insufficient to keep the merged firms from raising prices or cutting benefits.
The judge also ruled that neither new health insurance competitors nor corporate divestitures the companies proposed to address anti-trust concerns would replace competition eliminated by the merger.
In response, Aetna spokesman T.J. Crawford said "we're reviewing the opinion now and giving serious consideration to an appeal, after putting forward a compelling case" in the non-jury anti-trust trial heard by Bates in December.
Humana and the Department of Justice, which opposed the merger on anti-trust grounds, did not immediately respond to messages seeking comment on the decision.
Afederal judge Monday at least temporarily blocked the proposed $37 billion mega- merger between health insurance industry giants Aetna and Humana, ruling that the transaction would reduce competition for consumers.
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Although the decision can be appealed, the outcome could have significant ramifications on how U.S. seniors purchase Medicare health insurance coverage, as well as on insurance options available to individuals who don't have employer coverage.
"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 Court Judge John Bates wrote in his 156-page ruling. "After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the Court mostly agrees."
The judge based his decision enjoining the merger on evidence of "overwhelming market concentration figures" the merger would generate, plus head-to-head competition between Aetna and Humana that would be eliminated if the deal were finalized.
Aetna, Humana face federal antitrust lawyers in court
The companies contended their complementary strengths in technology and relationships with health care providers would benefit consumers. But Bates' ruling called the arguments "unpersuasive," and concluded that federal regulation would be insufficient to keep the merged firms from raising prices or cutting benefits.
The judge also ruled that neither new health insurance competitors nor corporate divestitures the companies proposed to address anti-trust concerns would replace competition eliminated by the merger.
In response, Aetna spokesman T.J. Crawford said "we're reviewing the opinion now and giving serious consideration to an appeal, after putting forward a compelling case" in the non-jury anti-trust trial heard by Bates in December.
Humana and the Department of Justice, which opposed the merger on anti-trust grounds, did not immediately respond to messages seeking comment on the decision.
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