This morning, the federal judge who heard the Aetna-Humana merger case, John Bates, issued a 160 page opinion blocking the merger based on federal antitrust law. Aetna and Humana are major players in the Medicare Advantage program. Aetna and Humana argued that Medicare is a unified market. The judge disagreed finding that traditional Medicare and Medicare Advantage markets are separate markets for antitrust law purposes. That appears to be the linchpin in the decision.
“We’re reviewing the opinion now and giving serious consideration to an appeal after putting forward a compelling case,” Aetna spokesman T.J. Crawford said. Humana did not respond to a request for comment. Humana stands to receive a $1 billion breakup fee from Aetna should the deal be abandoned.
Jeffrey Jacobovitz, a litigator at law firm Arnall Golden Gregory LLP, said that appeals at the D.C. Circuit succeed about one-third of the time and can take a year to resolve. He added that it would be difficult, though not impossible, for Aetna to wait for Trump’s new antitrust enforcers to be named and then strike a settlement to save the merger, perhaps by offering to divest more assets.
Aetna and Humana also sponsor FEHB plans. As noted yesterday, Judge Amy Berman Jackson’s decision in the Anthem – Cigna merger case is expected this week.
Govexec.com provided details on the President’s executive order issued today that imposes a temporary hiring freeze on federal agencies. “The memorandum gives the directors of the Office of Management and Budget (Trump’s pick, Rep. Mick Mulvaney, R-S.C., will face confirmation hearings Tuesday) and the Office of Personnel Management (Trump has yet to name an OPM leader) 90 days to come with a “long-term plan to reduce the size of the federal government through attrition.” Once that plan is implemented, the hiring freeze will expire.”