A federal judge has rejected health insurer Aetna’s bid to buy rival Humana on grounds that the deal would hurt competition in hundreds of Medicare Advantage markets, ultimately affecting the price consumers pay for coverage.
U.S. District Judge John Bates said in an opinion filed Monday that federal regulation would probably be “insufficient to prevent the merged firm from raising prices or reducing benefits,” and neither new competitors nor an Aetna plan to sell some of the combined company’s business to another insurer, Molina Healthcare Inc., would be enough to ease competitive concerns.
Aetna spokesman TJ Crawford said the insurer was reviewing the decision “and giving serious consideration to an appeal after putting forward a compelling case.”
Aetna, the nation’s third-largest health insurer, had announced in 2015 its plan to spend around $34 billion on Humana Inc. and become one of the top providers in the fast-growing Medicare Advantage market. Medicare Advantage plans are privately run versions of the government’s Medicare program for people who are over age 65 or disabled.
The Justice Department sued last summer to block Aetna’s deal and Blue Cross-Blue Shield carrier Anthem Inc.’s separate, $48-billion purchase of Cigna Corp. Both cases went to trial late last year. An opinion has yet to be rendered for the Anthem case.