Last month a federal judge blocked the proposed $37 billion merger between Aetna and Humana ruling that the merge would reduce competition for consumers. The merger between the two companies would have substantially decreased competition in markets for individual Medicare Advantage plans and health plans sold on the public exchanges according to U.S District Court Judge John Bates. The judge based his decision on evidence of “overwhelming market concentration figures” the merger would generate and also findings of head to head competition between Aetna and Humana that would be eliminated if the deal were finalized.
The companies contended the deal would not lessen competition. They also said their complementary strengths in technology and relationships with health care providers would benefit consumers. But, calling those arguments "unpersuasive," Bates's ruling concluded that federal regulation would be insufficient to keep the merged firms from raising prices or cutting benefits. Additionally, Bates concluded that Aetna tried to "leverage" the company's continued participation in federal Affordable Health Care Act exchanges in exchange "for favorable treatment from DOJ regarding the proposed merger." The judge cited court records in which CEO Mark Bertolini and other Aetna officials suggested the company would withdraw from the exchanges if the Department of Justice sued to block the merger with Humana.
In response, Aetna spokesman T.J. Crawford said "we're reviewing the opinion now and giving serious consideration to an appeal, after putting forward a compelling case" in the non-jury antitrust trial heard by Bates in December.
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