A federal judge blocked Aetna Inc.'s bid to buy Louisville-based Humana Inc. on grounds that it would reduce competition for consumers in Medicare Advantage markets, because it would ultimately affect the price of coverage. Medicare Advantage plans are privately run versions of Medicare for people who are over age 65 or disabled.
"In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges," Judge John Bates of the District of Columbia wrote in his 158-page ruling. "After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the court mostly agrees."
Bates said, Tom Murphy of the Associated Press writes, "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."
Bates also concluded that Aetna had tried to "leverage" its continued participation in the Patient Protection and Affordable Care Act exchanges in exchange "for favorable treatment from DOJ regarding the proposed merger," Kevin McCoy reports for USA Today.
Aetna's shares fell about 3 percent to $119.20 and Humana's stock finished more than 2 percent higher at $205.02 on Jan. 23, the day of the ruling.
The Department of Justice praised the ruling as a win for consumers.
"Today’s decision is a victory for American consumers — especially seniors and working families and individuals,” Deputy Assistant Attorney General Brent Snyder, the head of the department’s Antitrust Division, said in a statement. "Millions of consumers have benefited from competition between Aetna and Humana, and will continue to benefit, because of today’s decision to block this merger."
"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 in a statement.
Aetna, the nation's third-largest health insurer, announced its plan in 2015 to buy Humana for $34 billion and become one of the top providers of Medicare Advantage, Murphy notes. The Justice Department sued to block the deal and won. Click here to read the decision.
The Justice Department has also filed suit to block a proposed merger between Anthem Inc. and Cigna Corp., but this case is still pending, Murphy notes.
If approved, the two deals would consolidate the nation's five largest insurers into three, a list that includes UnitedHealth Group Inc., currently the largest. Murphy notes that the insurers argued that these mergers would help them negotiate better prices with drug companies, hospitals and doctor groups, as well as allow them to spread out the cost of technology investments.
"In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges," Judge John Bates of the District of Columbia wrote in his 158-page ruling. "After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the court mostly agrees."
Bates said, Tom Murphy of the Associated Press writes, "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."
Bates also concluded that Aetna had tried to "leverage" its continued participation in the Patient Protection and Affordable Care Act exchanges in exchange "for favorable treatment from DOJ regarding the proposed merger," Kevin McCoy reports for USA Today.
Aetna's shares fell about 3 percent to $119.20 and Humana's stock finished more than 2 percent higher at $205.02 on Jan. 23, the day of the ruling.
The Department of Justice praised the ruling as a win for consumers.
"Today’s decision is a victory for American consumers — especially seniors and working families and individuals,” Deputy Assistant Attorney General Brent Snyder, the head of the department’s Antitrust Division, said in a statement. "Millions of consumers have benefited from competition between Aetna and Humana, and will continue to benefit, because of today’s decision to block this merger."
"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 in a statement.
Aetna, the nation's third-largest health insurer, announced its plan in 2015 to buy Humana for $34 billion and become one of the top providers of Medicare Advantage, Murphy notes. The Justice Department sued to block the deal and won. Click here to read the decision.
The Justice Department has also filed suit to block a proposed merger between Anthem Inc. and Cigna Corp., but this case is still pending, Murphy notes.
If approved, the two deals would consolidate the nation's five largest insurers into three, a list that includes UnitedHealth Group Inc., currently the largest. Murphy notes that the insurers argued that these mergers would help them negotiate better prices with drug companies, hospitals and doctor groups, as well as allow them to spread out the cost of technology investments.
from Kentucky Health News http://ift.tt/2jXud4s
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