Unbiased Analysis of Today's Healthcare Issues

Judge blocks Aetna-Humana merger

Written By: Jason Shafrin - Jan• 24•17

A judge blocked a potential $37 billion deal for the merger of large U.S. health insurers Aetna and Humana.  The Washington Post provides some explanation behind the judge’s logic:

Bates wrote in his opinion that the proposed merger would have decreased competition substantially in the Medicare Advantage market in 364 counties. Aetna and Humana had argued that Medicare Advantage plans also competed against traditional Medicare options, but the judge sided with the Justice Department that the private Medicare plans were a separate market. The companies also proposed that divesting some of that business to a smaller insurer, Molina Healthcare, could have addressed those concerns, but the judge did not agree.

In an additional twist, the judge claimed to uncover the reason why Aetna was withdrawing from Obamacare exchanges.

Aetna withdrew from the majority of the exchanges that it had participated in this year, citing financial losses. The judge, however, wrote that Aetna withdrew from 17 counties highlighted in the case “specifically to evade judicial scrutiny of the merger.”

A big question is whether this ruling will stand.  Trump calls himself a more business-friendly president and it is unclear whether an appeal will be more likely to find more favorable judges if any are appointed by the new President.

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