The move stemmed from a ruling on a lawsuit brought last year by the Justice Department to prevent the health insurers from merging on the grounds that the deal would produce higher prices for consumers and fewer services for Medicare patients.
In a 156-page ruling, U.S. District Court Judge John Bates ruled that the government had proven its case that the $37 billion Aetna-Humana merger would lessen competition, thereby harming seniors who buy private Medicare coverage and some consumers who buy health insurance on public exchanges.
Aetna and Humana said they would “carefully consider all available options” in response to the ruling.
“We continue to believe a combined company will create access to higher-quality and more affordable care and deliver a better overall experience for those we serve,” Aetna chairman and chief executive officer Mark Bertolini and Humana CEO Bruce Broussard said in a joint statement.
The executives also said the companies would remain focused on their respective operating plans while assessing potential outcomes, which were expected to include appealing the judge’s ruling, revising the merger terms in a bid to soften Department of Justice opposition or scuttling the deal.
There was no immediate timetable for a final decision by the companies.
Aetna and Humana potentially could seek to start new discussions with Trump administration antitrust officials as a way to salvage the deal, although it’s unclear how aggressively the new administration will pursue corporate deals on antitrust grounds.
Muddying the picture are steps already taken by the administration to dismantle the Affordable Care Act, the health care law that prompted a frenzy of deal making activity by some of the nation’s largest insurers.
Aetna and Humana officials said the proposed combination would create the largest seller of Medicare Advantage plans, covering more than 4.1 million seniors. Medicare Advantage plans are privately run but reimbursed by Medicare.
Company officials touted the benefits of a combined company with annual operating revenue of more than $115 billion and more than 33 million members in medical plans. They said they expected to wring $1.25 billion in annual cost savings from the merger by 2018, which would “support our efforts to drive costs out of the system and offer more affordable products.”
But in his ruling, Bates wrote that the court was “unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anti-competitive effect for consumers.”
Meanwhile, the same court is considering another health insurer antitrust case brought by the Justice Department that seeks to block the proposed Anthem-Cigna merger. A decision in that case is expected soon.