Aetna and Humana end merger agreement

Aetna announced today that it would not appeal its loss in U.S. District Court last month. It will pay Humana $1 billion as a result. The court blocked Aetna’s proposed acquisition of Humana, concluding it was likely to substantially lessen competition for individual Medicare Advantage plans in all 364 counties, as argued by the Department of Justice and states in the antitrust challenge. A different federal judge last week issued an order blocking the proposed acquisition of Cigna by Anthem, which would have reduced the number of major national health insurers from five to three. Anthem has appealed the court’s decision. However, Cigna announced today that it is terminating its merger agreement with Anthem and suing for breach of contract. AHA had vigorously urged DOJ to challenge both deals on the grounds that they would reduce competition, inhibit innovation and harm consumers and hospitals in other ways.