A federal judge has blocked Aetna’s merger with Humana after finding that the health insurers’ $37 billion deal would leave seniors with fewer and costlier options for private Medicare coverage.
The merger risked irreparably harming competition within the Medicare Advantage market, and would hand Aetna and Humana a near monopoly across the nation, wrote U.S. District Court Judge John D. Bates in a verdict issued Monday.
The ruling represents a major victory for the Justice Department, which under former president Barack Obama sued to halt the merger over concerns that it would further consolidate an already-concentrated private Medicare landscape. Between Aetna and Humana, the companies serve 4.5 million of the nearly 17 million seniors enrolled in Medicare Advantage.
It’s unclear if President Donald Trump’s Justice Department will take a friendlier view of the merger.
Aetna and Humana may still appeal the ruling. “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 shortly after the verdict.
The companies had argued that their merger could not be anticompetitive because they would still have robust competition from a government-run Medicare program that serves two-thirds of eligible seniors.
But Bates rejected that argument, along with Aetna and Humana’s plan to alleviate antitrust concerns by selling 290,000 Medicare Advantage customers to Molina Healthcare.
“The companies’ rebuttal arguments are unpersuasive,” Bates wrote. “Federal regulation would likely be insufficient to prevent the merged firm from raising prices or reducing benefits, and neither entry by new competitors nor the proposed divestiture to Molina would suffice to replace competition eliminated by the merger.