Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>INDIANAPOLIS (CBS Connecticut and AP) – Aetna and Humana are calling off a $34 billion deal to combine the two major health insurers after a federal judge, citing antitrust concerns, shot down the deal.

Humana is entitled to a $1 billion breakup fee after the mutual decision to call off the tie-up, first announced in the summer of 2015.

It was the second major deal shot down in federal courts in as many months.

Another federal judge rejected Blue Cross-Blue Shield carrier Anthem’s bid to buy Cigna. Anthem is appealing that decision.</s>Feb. 14 (UPI) — Aetna and Humana canceled their $34 billion merger agreement Tuesday after a federal judge blocked the health insurance companies’ deal on antitrust grounds.

On Jan. 23, U.S. District Judge Robert Bates ruled that the merger of the two insurers would reduce competition in the private Medicare Advantage market for seniors.

Bates halted the deal even though the two companies agreed to sell some of their Medicare Advantage business in overlapping markets to Molina Healthcare, saying Molina does not have a strong track record in Medicare.

“While we continue to believe that a combined company would create greater value for healthcare consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” Mark Bertolini, Aetna chairman and CEO, said in a statement. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations.”

Aetna will pay Humana a $1 billion break-up fee, which will amount to $630 million after taxes, and will terminate the deal with Molina.

The proposed merger would have created the nation’s second largest insurer with estimated operating revenue of $115 billion this year and more than 33 million customers.

Last Wednesday, Judge Amy Berman Jackson blocked a $48 billion merger between health insurers Anthem and Cigna.

Cigna or Anthem may bid for Humana, Ana Gupte, an analyst at Leerink Partners, told Bloomberg.

UnitedHealth Group is the largest health insurer in the United States in terms of revenue, according to Forbes.</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>NEW YORK/WASHINGTON (Reuters) - Health insurers Aetna Inc and Humana Inc walked away from their $34 billion merger on Tuesday and Cigna Corp sought to end its deal with Anthem, shelving the industry consolidation they charted to address former President Barack Obama's Affordable Care Act.

Humana also said it would exit the Obamacare individual insurance market after this year, saying that early medical costs were running a bit high. Humana was one of several insurers that lost money in 2016 and then cut back offerings for this year, saying the program needs to be changed.

President Donald Trump and Republicans have vowed to repeal and replace Obamacare, the national healthcare reform law that created new individual insurance and expanded Medicaid, adding 20 million people to the ranks of the insured.

Trump on Tuesday tweeted about Humana's decision to exit the market, promising he "Will repeal, replace & save healthcare for ALL Americans."

The insurers, in seeking their mergers, had said the combinations would help them grow after the law changed everything from how doctors and hospitals are paid to the benefits insurers must provide.

The Aetna-Humana and Cigna-Anthem deals were announced in July 2015 and the Justice Department filed antitrust lawsuits a year later seeking to block the deals. Two federal judges separately ruled against the deals in recent weeks.

Government antitrust officials argued that both mergers would lead to less competition and higher prices for Americans, which Aetna and Anthem tried to disprove. The acquisitions would have reduced the number of national U.S. insurers from five to three.

After the defeat in court on Jan. 23, Aetna and Humana said they were weighing an appeal. But they opted on Tuesday to scrap the merger. Aetna shares rose 3 percent to $125.81, while Humana fell 0.4 percent to $205.97.

Aetna will pay Humana a $1 billion breakup fee, or $630 million after taxes, and terminated its plan to sell some Medicare Advantage assets to Molina Healthcare Inc, the companies said. Molina will receive a $75 million breakup fee.

Humana said it will buy back at least $2 billion worth of shares in 2017 and earn a net profit of $16.65 to $16.85 per share, helped by the payment from Aetna, and raise its dividend.

Humana is the first insurer to withdraw from the Obamacare exchanges for 2017, but Aetna and Anthem have both said they are considering doing so if changes are not made to the plan.

Wall Street analysts and investors suggested that the Trump administration might be friendlier to deals, and that Humana could again be a target for Anthem or Cigna.

Humana CEO Bruce Broussard said on a conference call that the company would consider any takeover offer, balancing "the probability and timing of completing a transaction," the current environment and the process it has just gone through.

Cigna said on Tuesday that it had notified Anthem that it had terminated its merger and that Anthem was required to pay a $1.85 billion breakup fee.

It also filed a lawsuit in Delaware, asking a judge to declare legal its decision to terminate the deal and to approve $13 billion in damages for shareholders who did not receive the takeover premium.

Anthem responded that the merger agreement was in place until April 30, 2017, and that Cigna could not back out. Anthem's shares closed down less than 1 percent at $163.32 while Cigna rose less than 1 percent to $146.68.

Several antitrust lawyers said the two companies - which have been at odds for the past year - likely will settle the lawsuit.

“We knew for weeks that all they were doing was positioning themselves for this fight,” said Matthew Cantor, an antitrust litigator with the law firm Constantine Cannon. “Over 90 percent of these high stakes commercial litigation settle.”</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.</s>Health insurance companies Aetna and Humana have called off their planned merger, citing a federal court ruling last month that blocked the deal.

"While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction," Aetna CEO Mark Bertolini said in a statement.

Aetna announced it would pay Humana a $1 billion fee for backing out of the agreement. Humana announced about $370 million of that would be paid as taxes.

In January, a federal judge ruled against Aetna's proposed acquisition of Humana in a victory for former President Obama's Justice Department, which sued Aetna last year.

"The suit alleged that the merger would hurt competition in the health care market, leading to higher prices for consumers and fewer services for Medicare patients. "U.S. District Judge John Bates found that to be the case, writing in his decision 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' in 364 counties. "Medicare Advantage plans are privately run but reimbursed by Medicare."



In his decision, Judge Bates also spent considerable time discussing the motive behind Aetna's decision to withdraw its insurance plans from 17 counties where Aetna and Humana both sold plans on the public exchanges.

As NPR's Scott Hensley reported, a letter leaked to reporters last summer indicated Aetna CEO Mark Bertolini had tied his company's decisions about participating in the exchanges to the Justice Department's decision on the merger.

Bates rejected Aetna's claim that it had withdrawn its insurance plans for business reasons, writing that, "Aetna tried to leverage its participation in the exchanges for favorable treatment from DOJ regarding the proposed merger."

That leveraging clearly didn't work — the DOJ sued Aetna and, with Bates's ruling and today's announcement, decisively won.

The termination of the Aetna-Humana deal comes less than a week after another federal judge blocked a proposed merger between health insurance companies Anthem and Cigna.

On Feb. 8, U.S. District Judge Amy Berman Jackson ruled that the Justice Department's opposition to the Anthem-Cigna deal was well-founded, and that the merger would reduce competition in the health insurance market and raise prices, as we reported.

Anthem said it was appealing the decision, The Wall Street Journal reported.
Aetna and Humana terminate their proposed merger that had been blocked last month by a U.S. federal judge. Aetna announces it will pay Humana the $1 billion fee for calling off the agreement.