Federal Judge Blocks Proposed Health Insurer Aetna-Humana Merger

Jan 25, 2017 | Uncategorized

Federal Judge Blocks Proposed Health Insurer Aetna-Humana MergerThe proposed merger of Aetna Inc. and Humana Inc. was blocked by a United States Federal Judge earlier this week. Read more about this in the article below. nnA U.S. judge blocked on Monday health insurer Aetna Inc’s proposed $34 billion acquisition of smaller peer Humana Inc, raising the stakes for rival Anthem Inc as it battles to close a $54 billion deal to buy Cigna Corp. The ruling is another victory for the U.S. Justice Department, whose antitrust enforcement became much more aggressive during former U.S. President Barack Obama’s eight years in office, which ended last week.nnObama’s successor, Donald Trump, and a Republican-controlled legislature are seeking to undo much of the Affordable Care Act, better known as Obamacare. The law reshaped the U.S. healthcare industry by mandating health insurance and creating online exchanges where consumers can shop for individual policies and get subsidies. Aetna, Humana, Anthem and Cigna had cited Obamacare as one of the main reasons their industry needed to consolidate to cope with the costs of expanding coverage. Their shares ended trading on Monday at levels that suggested that investors continued to see little chance that the two mergers would happen.nnThe U.S. Justice Department filed a lawsuit last July to block Aetna’s acquisition of Humana and Anthem’s acquisition of Cigna, arguing that the two deals would lead to higher prices. Anthem and Cigna are still waiting for a judge to rule on whether their merger can proceed. Investors have long been skeptical that this deal can be approved, and Leerink Research analyst Ana Gupte reiterated on Monday that she expected to also see this deal blocked. In his ruling, Judge John Bates of the U.S. District Court for the District of Columbia said the proposed deal would “substantially lessen competition” in the sale of Medicare Advantage plans in 364 counties in 21 states that the Justice Department had identified in its complaint, and on the Obamacare exchange in three Florida counties.n

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nThis article was originally posted on Reuters.com.