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U.S. blocks health insurer Aetna's $34 billion Humana acquisition -heartbreaking I tell you

By MMR follow MMR   2017 Jan 23, 11:17am 1,059 views   0 comments   watch   nsfw   quote   share    

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 clear a $54 billion deal to buy Cigna Corp.

The ruling is the latest sign of antitrust authorities having grown more assertive under U.S. President Barack Obama, whose term ended last week. His successor, Donald Trump, and a Republican party-controlled legislature are seeking to undo much of the Affordable Care Act, better known as Obamacare, that reshaped the U.S. healthcare industry, including insurance practices.

The U.S. Justice Department had 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 now also waiting for a judge to rule on whether their merger can proceed.

#politics #healthcare #insurance

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 identified in their complaint, and in individual insurance markets on the Obamacare exchange in three Florida counties. Aetna said it was considering an appeal.

Bates dismissed Aetna's argument that there was plenty of choice for consumers because Medicare Advantage, which is managed by insurance companies, competes with traditional Medicare for the elderly and disabled, which is managed by the government.

"In that (Medicare Advantage) market, which is the primary focus of this case, the merger is presumptively unlawful - a conclusion that is strongly supported by direct evidence of head-to-head competition as well. The companies’ rebuttal arguments are not persuasive," Bates wrote in a 158-page decision.

Aetna's share price was down 2.3 percent, falling to $119. Humana's shares were flat at midday, trading about $200.

"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.

Humana is the second-largest Medicare Advantage insurer while Aetna is the fourth, and the two compete in more than 600 counties, the government said in its complaint.

Doctors and hospitals had urged the Justice Department to try to block the deal, and some large employers also opposed the combination.

(Reporting by Diane Bartz in Washington, D.C.; Additional reporting by Caroline Humer and Carl O'Donnell in New York; Editing by Chizu Nomiyama and Andrew Hay)

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