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By Miriam Raftery, East County Magazine

January 27, 2017 (Washington D.C.) -- In a victory for consumers, the U.S. Court for the District of Columbia has issued an injunction blocking the proposed merger of insurance giants Aetna, Inc. and Humana, Inc. 

The Court also found that Aetna misled the public in claiming it withdrew from insurance exchanges in three states, including California, due to problems with the Affordable Care Act. Instead, the Court found that Aetna sought to avoid antitrust scrutiny in order to have its merger with Humana approved by regulators.

California Insurance Commissioner Dave Jones hailed the win as a victory for consumers.

"One thing we know for sure-consumers do not benefit when there are fewer choices and a lack of competition," said Jones. "The Aetna and Humana merger has anti-competitive impacts that will likely result in increased prices, decreased availability of health insurance products, and decreased quality and access to health care. Even before the proposed merger, Aetna had a track record of excessive rate increases on small businesses in California."

The Court found the merger would substantially lessen competition for Medicare Advantage plans, as well as substantially lessen competition on the Florida exchange. The Court also found any efficiencies resulting from the proposed merger are not sufficient to mitigate the anti-competitive effects for consumers.

The Court's decision is consistent with the June 23, 2016 letter from Insurance Commissioner Jones to the U.S. Department of Justice in which he conveyed his finding that the proposed merger of Aetna and Humana was anti-competitive.  Commissioner Jones held a public hearing in April 2016 regarding the Aetna-Humana proposed merger, and found it would reduce competition in an already heavily concentrated commercial health insurance markets in California and across the nation.

Jones' findings also included the negative impact on the millions of seniors nationally who rely on Medicare Advantage. A merged Aetna-Humana would have had 26 percent of all Medicare Advantage enrollees in the nation, more than any other insurer.

The proposed Aetna-Humana merger would have combined the third and fifth largest health insurers by market value, in a setting where the second and fourth largest health insurers by market value (Anthem and Cigna) are also seeking to merge. Jones concluded that the market concentration in California and in other markets resulting from the Aetna and Humana merger would damage access, quality, and affordability for consumers.

"The Aetna merger with Humana would permanently remove one of the nation's largest health insurers from the market and further reduce competition," Jones continued. "With regard to the Aetna-Humana merger, once again, bigger is not better for consumers, businesses, or health insurance markets."

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