Missouri's top insurance regulator has issued an order barring Aetna and Humana from offering certain insurance plans in the state if the two companies proceed with the $37 billion merger they announced last summer.
Plans affected by the order include comprehensive individual, comprehensive small group and both group and individual Medicare Advantage plans, according to the 43-page order.
David Balto, a former attorney within the antitrust division of U.S. Department of Justice, said the move by Missouri will "embolden other states and the DOJ to block the merger entirely."
Balto, an opponent of the merger, said Missouri is the first state to rule against the Aetna-Humana merger. However, other states like Florida have ruled in favor of the combined company. In February, Aetna said they had secured 10 of 20 state approvals needed.
Aetna officials said: “This order does not impede the DOJ approval process. We are disappointed with the Missouri order but expect to have a constructive dialogue with the state to address their concerns."
In the report, the Department of Insurance, Financial Institutions & Professional Registration cited decreased competition as a reason for its move.
Aetna and Humana have 30 days to submit a plan to "remedy the anticompetitive impact of the acquisition," according to the order, which is not considered final.
Last week, various stakeholders, including health care providers and consumer groups, petitioned the state's top insurance regulator to block the Aetna-Humana merger in Missouri.
In their request, the groups said a merger would lead to decreased competition and high insurance rates as a result of the combined company.
The insurance department found that post merger, the combined company's market share in individual Medicare Advantage plans would exceed 70 percent in 33 counties. Medicare Advantage plans allow seniors to enroll in health plans managed by private health insurance companies instead of having care covered by Medicare's traditional fee-for-service program.
Tim Greaney, an antitrust expert and professor at St. Louis University's School of Law, called the ruling a "major stumbling block" for Aetna and a win for Missouri consumers.
He said the DOJ now needs to consider blocking the deal entirely throughout the rest of the country. The DOJ does have options it could impose on the transaction. It could require the merged company to sell off, or divest, parts of its business to satisfy anticompetitive concerns. But Greaney said due to the considerable amount of divestitures that would need to be made across the country, the DOJ should block the deal, calling it a "bridge too far," he told the Post-Dispatch.
Samantha Liss • 314-340-8017
@samanthann on Twitter
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