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Aetna's Merger With Humana Blocked By Judge

Jan 23, 2017

A federal judge has issued an injunction blocking the proposed merger of health insurers Aetna and Humana.

Judge John Bates said in his decision that the deal would be "likely to substantially lessen competition in the sale of individual Medicare Advantage plans in 364 counties identified in the Complaint." He also said it would adversely affect the individual insurance market on public exchanges.

Hartford-based Aetna said it is reviewing the ruling and giving serious consideration to an appeal.

The Justice Department filed a lawsuit last July aiming to block the merger, as well as that of two other insurers: Bloomfield-based Cigna and Anthem. The two mergers were then considered in separate court cases; a ruling is also expected shortly in the Cigna-Anthem case.

Aetna may now owe Humana a $1 billion breakup fee, if no appeal is successful. The defeat of the deal could also have longer-term implications for Connecticut. There had been speculation that if the merger had gone ahead, Aetna was considering moving its headquarters to Humana's home state of Kentucky.

A spokesman for Governor Dannel Malloy issued a statement saying, "the administration stands ready to work with the insurance sector as they move forward from this decision, as we would with any of Connecticut’s key industries. As always, our ultimate goal is retaining and growing jobs in Connecticut.”

But others in the state welcomed the outcome. Senator Richard Blumenthal had opposed both health insurance mergers because of their potential negative effect on consumers. He called the ruling "a decisive victory for jobs, consumers, and healthcare."