But the deal came under sharp criticism from consumer advocates and government officials who argued that the private market was already concentrated: Individuals would suffer from a lack of choice and competition in certain markets. UnitedHealth, Humana and Aetna were the three largest players in the Medicare Advantage market, according to an analysis by the Kaiser Family Foundation last year.

In his ruling, the judge, John D. Bates of the United States District Court for the District of Columbia, said the court “mostly agrees” with the Justice Department’s argument that the deal would lessen competition for Medicare Advantage plans as well as individual health insurance sold in state marketplaces.

Judge Bates rejected the companies’ rebuttal, saying that government regulation would be unable to prevent the combined entity from “raising prices or reducing benefits.” He said that neither new competitors nor divestitures would be enough to address the concentration that would result from the merger.

The insurers had argued that the merger would allow them to become more efficient, passing those savings on to consumers. But the judge said he did not think the merger would benefit people buying policies, especially in those markets where the combination of the companies would have a large share of the business.

“The court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anticompetitive effects for consumers in the challenged markets,” he wrote.

Over the last few years, the Obama administration became more aggressive in blocking deals, especially in health care. The government has blocked mergers among large hospital systems and contributed to dismantling the $152 billion deal between Pfizer and Allergan.

Monday’s ruling came six months after the Justice Department sued to block both the Aetna and the Cigna deals. Both were seen as unlikely to succeed, although the merger between Cigna and Anthem was seen as even less likely to be approved because those two companies have more overlap nationally and have been unable to present a unified front.</s>Six months after the U.S. Department of Justice and attorneys general from eight states and the District of Columbia sued to stop the merger of insurance giants Aetna and Humana, the federal judge in the case has blocked the deal from moving forward.

The DOJ had argued that the combination of these two companies would “substantially” harm competition in the marketplace for both individual health insurance plans purchased through public exchanges, and for Medicare Advantage insurance plans.

The Medicare Advantage coverage posed the larger antitrust concern, as investigators for the government identified 364 counties in 21 states where they believe a combined Aetna/Humana would have market share levels for this insurance above what is generally considered to be unlawful.

The insurers countered that the DOJ was neglecting to account for traditional Medicare plans provided through state agencies. When combining Original Medicare and Medicare Advantage, argued the insurance companies, there are sufficient competition in the marketplace.

With regard to issues about the public exchanges, the DOJ concluded that, post-merger, Aetna and Humana would hold too much market share in 17 counties in three different states. The insurance companies claimed that is a non-problem, as Aetna is not offering plans in these exchanges for 2017.

In the end, D.C. District Court Judge John Bates sided with the DOJ and the states, concluding in his 158-page opinion [PDF] that the proposed merger is “likely to substantially lessen competition in Medicare Advantage in all 364 complaint counties,” and that the government was correct to not consider Original Medicare as a direct competitor to Advantage.

Health insurance exchanges in three Florida counties would also be adversely affected. The judge also notes that Aetna withdrew some selling insurance in the other counties mentioned in the DOJ complaint to “evade judicial scrutiny of the merger,” and was therefore not an indicator that the company wouldn’t simply re-enter those markets after the merger.

Aetna says it is weighing an appeal.

Today’s ruling was applauded by some consumer advocates, including our colleagues at Consumers Union, who had previously testified before the Senate Judiciary Committee and the California Department of Insurance about the potential negative impact of this merger.

“The Justice Department laid out strong proof at trial that the merger of these two health insurance giants would have seriously harmed consumers across the country, especially seniors using Medicare Advantage, leaving them with fewer choices, higher costs, and ultimately, with inferior coverage,” said George Slover, senior policy counsel at CU. “This problematic deal simply couldn’t be fixed, and we are pleased the court has agreed.”</s>Jan. 23 (UPI) — A federal judge on Monday decided that a megamerger between insurance giants Aetna and Humana would likely cause more harm than good — at least from the patient’s perspective.

The proposed merger, announced 18 months ago, would have combined two of the United States’ largest insurers. Aetna announced it would acquire Humana in July 2015 for about $37 billion in cash and stock.

The plan, though, has languished for months while seeking federal approval. The U.S. Department of Justice filed a lawsuit to block the merger last year, believing it would stifle competitors. The trial began earlier this month.

Government attorneys argued that such a merger would probably harm seniors who buy private Medicare insurance and some Americans who buy their coverage through Affordable Care Act exchanges.

“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,” U.S. District Judge John D. Bates wrote in a 156-page ruling. “After a 13-day trial, and based on careful consideration of the law, evidence, and arguments, the Court mostly agrees.”

Aetna and Humana said the merger would combine their strengths and result in more cost-effective service.

“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.

The rejection of the deal is a victory for the former Obama administration, which also filed a suit to stop a merger between Anthem and Cigna. A decision in that case is also expected soon.</s>A U.S. federal judge blocked on Monday health insurer Aetna 's proposed $34 billion merger with rival Humana , saying it was illegal under antitrust law.

Judge John Bates of the U.S. District Court for the District of Columbia said the proposed deal would "substantially lessen competition in the sale of individual Medicare Advantage plans in 364 counties identified in the complaint and in the sale of individual commercial insurance on the public exchanges in three counties in Florida."

The Justice Department filed a lawsuit on July 21, 2016 to block Aetna's acquisition of Humana and Anthem 's purchase of Cigna , saying the two deals would lead to higher prices.</s>WASHINGTON—A federal judge Monday blocked the proposed merger of health insurers Aetna Inc. and Humana Inc. on antitrust grounds, a potentially fatal legal blow to the $34 billion deal.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.</s>A federal judge Monday blocked the proposed merger of health insurers Aetna Inc. and Humana Inc. on antitrust grounds, a potentially fatal legal blow to the $34 billion deal.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition.

The judge said the transaction could mean higher prices and reduced services for seniors who purchase the private Medicare plans known as Medicare Advantage. He also said the merger would harm competition on public insurance exchanges in parts of Florida.

Aetna and Humana didn't immediately respond to requests for comment. Shares of the companies fell 2.2% and 2.4%, respectively, in midday trading.

Aetna and Humana announced their planned merger in July 2015, saying the deal would allow them to offer more cost-effective products by combining their strengths and becoming more efficient. Justice Department antitrust enforcers filed a lawsuit challenging the transaction a year later. A trial took place last month.

The Aetna-Humana deal is one of two major health insurance mergers being challenged by the Justice Department. The department simultaneously sued to block the proposed combination of Anthem Inc. and Cigna Corp. A trial in that case took place in the same courthouse and a different judge, Amy Berman Jackson, is expected to rule soon.

The lawsuits were among the last major law enforcement actions taken by Obama administration antitrust officials.</s>U.S. District Judge John D. Bates in Washington ruled Monday that the transaction violates antitrust laws by reducing competition among insurers. Click here to read the ruling in its entirety.

The U.S. Justice Department sued in July to block the merger over fears it would create a monopoly in the Medicare Advantage market.

The proposed merger made big news in Louisville when it was first announced in 2015, prompting a news conference in which Mayor Greg Fischer expressed optimism about potential job growth in the city.

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+ Aetna-Humana merger lawsuit set to begin

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+ Aetna reaches deal to buy Humana for $37 billion

Meanwhile, the Justice Department is embroiled in a second similar antitrust suit - this one a proposed $54 billion merger between Anthem and Cigna.</s>A federal judge in Washington has blocked another giant health care merger: insurer Aetna had been hoping to buy Humana for some $37 billion. Judge John Bates found the merger would violate antitrust laws, and also sided with the government on a dicey issue involving the Affordable Care Act.

When Aetna pulled out of the Obamacare exchanges in 11 out of 15 states last summer, it said it did so purely for reasons of profitability. Documents that have come out in this case suggest Aetna was using its participation in the Obamacare exchanges as a bargaining chip with the U.S. government. Aetna said it may appeal this week’s merger decision.</s>A federal judge ruled Monday to block Aetna's proposed merger with Humana, in a deal struck last July prior to President Donald Trump 's election victory and accompanying promise to dismantle the Affordable Care Act with implications for insurers. Shares of Hartford-based Aetna were down 3 percent Monday afternoon to $119.27, while stock of Louisville, Ky.-based Humana was flat at just over $200.

Start the conversation, or Read more at Norwalk Citizen News.</s>NEW YORK: A US federal judge on Monday blocked Aetna's proposed US$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" programme for seniors, an alternative to the federal healthcare programme, 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 158-page decision. "The proposed merger of Aetna and Humana will be enjoined."

Aetna, which would be forced to pay US$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 per cent to US$204.15 and Aetna fell 2.8 per cent to US$119.08. Meanwhile, Anthem lost 0.5 per cent to US$149.89 while the Cigna added 0.4 per cent to US$145.38.
John D. Bates, United States federal judge for the United States District Court for the District of Columbia, blocks a proposed merger by health insurance companies Aetna and Humana.