antitrust

Aetna-Humana Merger Blocked

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The District of Columbia federal court recently ruled that a proposed $37 billion merger between health insurance giants Aetna and Humana cannot proceed, granting the US Department of Justice’s bid to block the combination on antitrust grounds (United States v. Aetna, Inc., et al., January 23, 2017, Bates, J.).  The Aetna/Humana deal is one of two blockbuster health insurance company mergers that have been challenged by Justice, the other being the Anthem/Cigna deal that remains pending before a different judge in the same court.

The proposed merger would create the largest seller of Medicare Advantage plans, and the challenge by the Department of Justice alleged, among other things, that the effect of the transaction may be to substantially lessen competition in the market for individual Medicare Advantage plans in 364 counties across 21 states.  The district court ultimately agreed, rejecting the insurers’ efforts to expand the relevant market definition to include both Original Medicare plans, which are offered directly by the government,