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Judge swats Aetna-Humana insurer combo

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A federal judge has rejected health insurer Aetna’s plan to buy rival Humana Inc. for about $34 billion and become a major player in the market for Medicare Advantage coverage.

U.S. District Judge John Bates said in an opinion filed Monday that he largely agrees with federal regulators who contended that such a combination would hurt competition.

Aetna spokesman TJ Crawford said the insurer was reviewing the decision “and giving serious consideration to an appeal after putting forward a compelling case.”

A U.S. Department of Justice spokesman had no immediate comment on the decision.

The Justice Department sued last summer to block Aetna’s deal and Blue Cross-Blue Shield carrier Anthem Inc.’s proposed $48-billion purchase of Cigna Corp. Both cases went to trial late last year. An opinion has yet to be rendered for the Anthem case.

The two deals would consolidate the nation’s five largest insurers into three, a list that includes UnitedHealth Group Inc., currently the largest.

The big insurers argued that by getting bigger they will be able to negotiate better prices with pharmaceutical companies, hospitals and doctor groups that also are growing. They also expect to cut expenses and add more customers, which helps them better spread the cost of investing in technology to manage and improve care.

But Bates said in a 158-page opinion that the Aetna-Humana combination would “likely substantially lessen competition” in a couple markets: Medicare Advantage plans, which are fast-growing, privately run versions of the government’s Medicare program, and on public health insurance exchanges.

Federal regulators had said in July, when they sued to block the deals, that the combinations would hurt competition that restrains the price of coverage and reduce benefits, among other drawbacks.

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