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A federal judge on Monday blocked the proposed $37 billion merger between insurance giants Aetna and Humana, striking a victory for antitrust measures taken under the Obama administration.
The lawsuit, brought in July on behalf of the Justice Department, said the merger would reduce competition and limit patients’ coverage options and the kind of care they receive.
U.S. District Judge John Bates, who issued the decision, agreed.
“The proposed merger is likely to substantially lessen competition in the sale of individual Medicare Advantage plans in 364 counties identified in the Complaint and in the sale of individual commercial insurance on the public exchanges in three counties in Florida identified in the Complaint,” he wrote in court documents.
Aetna and Humana cited their intent on July 2, 2015, to merge in order to make changes to Medicare Advantage, which covers seniors and people with disabilities. The merger would also have impacted people who get insurance from their employer and those who buy private plans through the Affordable Care Act, former President Barack Obama’s health care law.
Last year, Aetna exited many of the exchanges that sold these plans, which had the effect of raising premiums and limiting patient choice.
If the merger with Humana were to go forward, the Justice Department argued, many people who buy Medicare Advantage plans would only have one insurer to choose from, and many employers would go from having four plans to three.
Aetna and Human have the option to appeal, and if the merger does not go forward the terms of the agreement state that Aetna will owe Humana a $1 billion breakup fee.
“We are reviewing the opinion now and giving serious consideration to an appeal after putting forward a compelling case,” says T.J. Crawford, Aetna spokesman.
Another challenge brought by the Justice Department is pending on a merger between Anthem and Cigna, a deal valued at $54 billion that would mark the largest health insurance deal in U.S. history.
On the other hand, A federal judge is expected to block a proposed deal between health insurer Anthem and Cigna , the New York Post reported, citing sources.
Anthem, which operates Blue Cross Blue Shield health insurance plans in 14 U.S. states, is trying to buy smaller rival Cigna. The government sued seven months ago to stop the deal, saying it was anti-competitive.
Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia has not yet issued an opinion on the case. The trial began late last year, and Cigna said it ended on Jan. 4.
Anthem is preparing for an appeal of any ruling that doesn’t go its way and insiders expect Jackson to rule against the deal, the Post reported.
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