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Feds, states file suit to block huge health plan mergers

Florida joins Aetna-Humana suit, cites Palm Beach County among concerns

The U.S. Department of Justice and multiple states announced lawsuits to block two blockbuster U.S. health mergers Thursday, as Florida officials identified Palm Beach County among the markets where a proposed Aetna-Humana deal could hurt competition and consumers most.

Aetna and Humana promised a “vigorous” defense of their pending union, but it means at least delay — and at most overhauls or death — for deals that would reshape the health insurance industry nationwide and in Florida. In the other proposed merger that drew government opposition, Anthem called objections to its combination with Cigna “misguided.”

“Competitive insurance markets are essential to providing Americans the affordable and high-quality health care they deserve,” Attorney General Loretta Lynch said in a statement. “These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies.”

The Aetna-Humana merger would create a company poised to become Florida’s largest, measured by premium dollars. The two deals involve four of the state’s nine largest health insurers with more than $17 billion in Florida premiums.

Aetna and Humana said they would vigorously defend a transaction that “offers tremendous value to consumers,” in part by eliminating waste and reducing costs.

A statement from Anthem called the action an “unfortunate and misguided step backwards.”

Regardless of their outcome in court, the challenges already have had an impact. Cigna said, “We do not believe the transaction will close in 2016, and the earliest it could close is 2017, if at all.”

Eight states — Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania and Virginia — and the District of Columbia joined the Justice Department’s challenge in federal court in Washington, D.C., of Aetna’s $37 billion acquisition of Humana.

Eleven states — California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia — and the District of Columbia hitched wagons to the department’s challenge of Anthem’s $54 billion acquisition of Cigna.

Officials contend Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on public exchanges in Palm Beach, Broward and Volusia counties, as well as numerous counties in other states. More than 700,000 people would be affected in that segment of the market, they said.

Also flagged: “particularly acute” concerns about Medicare Advantage competition in St. Lucie, Broward and seven other Florida counties.

“Competition in our health insurance markets is crucial to keeping premiums down and the quality of care up, particularly when it comes to our seniors and other vulnerable populations, the individuals most affected by this proposed acquisition,” Florida Attorney General Pam Bondi said in a statement. “It is important that we do everything we can to preserve competition in these markets.”

As The Palm Beach Post reported last year, a merged Aetna and Humana “would give the combined entity over half of all Medicare Advantage enrollees in five Florida counties: Broward, Franklin, Palm Beach, Pasco, Volusia,” a coalition of consumer and labor groups including Consumers Union and Florida CHAIN warned.

Aetna responded Thursday that a combined company is “in the best interest of consumers, particularly seniors seeking affordable, high-quality Medicare Advantage plans.”

Consumers Union applauded moves to stop the deals.

“If these insurance giants were allowed to merge, they would have too much control over what our health care choices would be,” the consumer organization said. “We commend the Justice Department for taking action to block what would be a major setback for consumers.”

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