Aetna-Humana Deal Blocked 

Question: Does the defeat of the Aetna-Humana deal signal the end of mega-mergers?

Answer: Health insurance mega-mergers were dealt a serious blow last week when a federal judge in Washington, D.C. ruled in favor of the Department of Justice (“DOJ”) and blocked the proposed $37 billion merger of Aetna and Humana due to anti-competitive effects in violation of federal antitrust laws. The focus now shifts to the DOJ’s other case, which aims to stop an even larger $48 billion merger of two more mega-insurers: Anthem (the largest member of the Blue Cross network) and Cigna.

Some industry insiders believe the intense trend toward consolidation in the healthcare industry was driven by Obama-era policies, including the Affordable Care Act (“ACA”). The court’s ruling also mentioned Aetna’s much-publicized withdrawal from the ACA’s insurance exchanges last year, a departure widely viewed at the time as a symptom of the ACA’s weaknesses. According to the court, however, Aetna’s withdrawal was, at least in part, not a business decision about the ACA, but a strategy to “improve its litigation position.” As the DOJ that won this case was constituted of Obama appointees, it remains unclear how Trump’s DOJ, particularly the Antitrust Division, will approach these cases, including the likely appeal of this decision.

Weekly Charting Tip:

Ladies and Gentlemen, for this week’s Legal Brief my advice is simple- CHANGE YOUR PASSWORD!!!! We have all recently seen what can happen if you do not. You should change your password every month. It should not be made of your name or your birthday. Do NOT make it easy for the hacker. When HIPAA and HITECH kicks in, it can be very disruptive to your practice and to your wallet.

See you next week.       

Larry Kobak

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