A US District Court Judge has ruled against a $37 billion health plan merger.
The proposed merger of insurers Aetna and Humana has been blocked on antitrust grounds.
US District Court Judge John D. Bates today said the $37 billion proposal would "Substantially lessen competition in the sale of individual Medicare Advantage plans in 364 counties identified in the complaint and in the sale of individual commercial insurance on the public exchanges in three counties in Florida identified in the complaint."
The case was brought by the United States and the states of Delaware, Florida, Georgia, Illinois, Iowa, and Ohio, the Commonwealths of Pennsylvania and Virginia and the District of Columbia.
In the complaint, the plaintiffs charged that the Medicare Advantage industry "is dominated by five large insurers commonly referred to as the "big five', or as Humana's CEO described the group, the 'G-5'," adding that more mergers could be underway.
The court's decision was hailed by the American Medical Association (AMA). In a statement attributed to AMA President Andrew Gurman, MD, the AMA said Aetna would have become the largest seller of Medicare Advantage plans in the US.
"Elderly patients were the big winners today as a federal court imposed an injunction on Aetna's $37 billion acquisition of Humana," Gurman wrote.
Aetna's plan to take over Human was first announced in July 2015.
Another part of Bates ruling applauded by the AMA is the judge's view that Medicare Advantage plans are a "a separate and distinct market that does not compete with traditional Medicare," Gurman continued.
The AMA also approved the part of the decision that has the effect of preserving competition among those Aetna and Humana plans sold on the public exchanges established through the Affordable Care Act.
The group had long criticized the planned merger.
"The AMA's stand against this anti competitive merger shows again that when doctors join together, the best outcome for patients and doctors can be achieved," the AMA said.
Another planned mega-merger, that of Anthem and Cigna has yet to be decided.
That deal is valued at $54 billion.
In their complaint, the plaintiffs said that the mergers sought would "reshape the industry, eliminating two innovative competitors--Humana and Cigna--at a time when the industry is experimenting with new ways to lower health-care costs."
When Congress introduced Medicare Advantage in 1997 the program was meant to introduce competition to traditional fee-for-service Medicare, and it has been popular with Medicare-eligible people due to its lower costs.
The government's legal team, based in Washington, DC, was headed by Deputy Assistant Attorney General Sonia Pfaffenroth, Director of Civil Enforcement Patricia Brink, Director of Litigation Eric Mahr, and Litigation I Chief Peter Mucchetti.