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| Judge Blocks Aetna’s $37 Billion Deal for Humana | Judge Blocks Aetna’s $37 Billion Deal for Humana |
| (about 2 hours later) | |
| A federal judge ruled on Monday that a $37 billion merger between the health insurance providers Aetna and Humana should not be consummated on antitrust grounds, siding with the Justice Department, which had been seeking to block the deal. | A federal judge ruled on Monday that a $37 billion merger between the health insurance providers Aetna and Humana should not be consummated on antitrust grounds, siding with the Justice Department, which had been seeking to block the deal. |
| The court “mostly agrees” with the government’s argument that the deal would lessen competition for Medicare Advantage plans and health insurance sold on public exchanges, Judge John D. Bates of the Federal District Court for the District of Columbia said in the ruling. | The court “mostly agrees” with the government’s argument that the deal would lessen competition for Medicare Advantage plans and health insurance sold on public exchanges, Judge John D. Bates of the Federal District Court for the District of Columbia said in the ruling. |
| Judge Bates disagreed with the company’s rebuttal, arguing that regulation would be unable to prevent the combined firm from “raising prices or reducing benefits.” He said that neither new competitors nor divestitures would be enough to attenuate the concentration in the industry from such a deal. | Judge Bates disagreed with the company’s rebuttal, arguing that regulation would be unable to prevent the combined firm from “raising prices or reducing benefits.” He said that neither new competitors nor divestitures would be enough to attenuate the concentration in the industry from such a deal. |
| An Aetna spokesman said the company was reviewing the opinion and “is giving serious consideration to an appeal.” | |
| Representatives for both Humana and the Justice Department did not immediately respond to an email seeking comment. | Representatives for both Humana and the Justice Department did not immediately respond to an email seeking comment. |
| Shares of Aetna were down about 2.8 percent in midday trading; Humana shares were down slightly. | Shares of Aetna were down about 2.8 percent in midday trading; Humana shares were down slightly. |
| The ruling came six months after the Justice Department sued to block the deal, along with a separate one between the health insurance providers Cigna and Anthem. | The ruling came six months after the Justice Department sued to block the deal, along with a separate one between the health insurance providers Cigna and Anthem. |
| Another judge, Amy Berman Jackson, has yet to issue a ruling on Cigna and Anthem, a merger that had been seen as the riskier transaction because the two companies have more overlap nationally. | Another judge, Amy Berman Jackson, has yet to issue a ruling on Cigna and Anthem, a merger that had been seen as the riskier transaction because the two companies have more overlap nationally. |
| Over the last few years, the Obama administration became more aggressive in blocking deals, especially in the health care industry. The government has blocked mergers among the large hospital systems and contributed to dismantling the $152 billion deal between Pfizer and Allergan for tax resources. | Over the last few years, the Obama administration became more aggressive in blocking deals, especially in the health care industry. The government has blocked mergers among the large hospital systems and contributed to dismantling the $152 billion deal between Pfizer and Allergan for tax resources. |
| Since the health insurance deals were first announced in the summer of 2015, however, the future for the industry has become more uncertain. | Since the health insurance deals were first announced in the summer of 2015, however, the future for the industry has become more uncertain. |
| President Trump during his first few days in office has signed an executive order urging government agencies to pull back the reins on the Affordable Care Act. In doing so, he continued to focus on his campaign promise to repeal and replace the controversial law, making it unclear what that means exactly for health insurance companies. | President Trump during his first few days in office has signed an executive order urging government agencies to pull back the reins on the Affordable Care Act. In doing so, he continued to focus on his campaign promise to repeal and replace the controversial law, making it unclear what that means exactly for health insurance companies. |
| One of the driving factors behind the flurry of health insurance mergers was so that the companies could remain efficient in light of the law. Regardless of what happens with the health care law, the judge did not believe the combination would be helpful to a large portion of Americans. | One of the driving factors behind the flurry of health insurance mergers was so that the companies could remain efficient in light of the law. Regardless of what happens with the health care law, the judge did not believe the combination would be helpful to a large portion of Americans. |
| “The court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anticompetitive effects for consumers in the challenged markets,” Judge Bates wrote. | “The court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anticompetitive effects for consumers in the challenged markets,” Judge Bates wrote. |