US judge blocks proposed Aetna-Humana merger

A US federal judge on Monday blocked Aetna’s proposed $37 billion acquisition of rival health insurer Humana, ruling the combination would stifle competition in the health sector.

US district judge John Bates upheld the essential arguments of antitrust regulators who sued to block the deal, saying that combining two of the big five American health insurers would harm consumers.

He highlighted consumers in the “Medicare Advantage” program for seniors, an alternative to the federal health-care program, and the three health exchanges in Florida set up under the Affordable Care Act.

“The Court concludes that the proposed merger is likely to substantially lessen competition,” Bates said in a 158page decision.

“The proposed merger of Aetna and Humana will be enjoined.”

Aetna, which would be forced to pay $1 billion to Humana if the deal falls through, said it is considering appealing the decision.

But the decision to block the merger was applauded by US Justice Department antitrust chief Brent Snyder.

“Aetna attempted to buy a formidable rival, Humana, instead of competing independently to win customers,” Snyder 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.”

The decision could be a bad omen for the merger of two of the other big five American private insurers who sought to merge, Cigna and Anthem. A trial was held on the Cigna-Anthem merger with a different judge late last year, shortly before the start of the 13-day trial on Aetna-Humana.

The decision comes as President Donald Trump takes initial steps to dismantle the Affordable Care Act, also known as Obamacare. Congressional Republicans have said undoing the signature legislation of former president Barack Obama is one of their top priorities.

In afternoon trading, shares of Humana gained 1.8 percent to $204.15 and Aetna fell 2.8 percent to $119.08. Meanwhile, Anthem lost 0.5 percent to $149.89 while the Cigna added 0.4 percent to $145.38.