Judge for U.S. lawsuits to stop insurance mergers may drop one case - Metro US

Judge for U.S. lawsuits to stop insurance mergers may drop one case

By Diane Bartz

By Diane Bartz

WASHINGTON (Reuters) – The judge assigned to rule whether the U.S. government can block the mega-mergers of health insurers Aetna Inc and Humana Inc , and Anthem Inc and Cigna Corp said on Thursday it would be difficult for him to decide both cases by the end of the year.

The U.S. Department of Justice filed lawsuits in July to block the multibillion-dollar mergers, saying they would reduce competition, raise prices for consumers and stifle innovation if the number of large, national insurers were to fall from five to three.

The assignment of Judge John Bates of the U.S. District Court for the District of Columbia to the cases had been seen as favorable for the insurers. He had ruled against antitrust enforcers in 2004 when he allowed Arch Coal Inc to buy Triton Coal.

Aetna and Humana urged Bates this week to hold trials and issue an opinion by the end of 2016.

Bates said in a pre-trial hearing on Thursday that was unlikely to happen.

“That’s my determination: that I can’t do both (by the end of the year),” he said. “Unless the schedule is put off, I’m sending one of the cases back.”

Bates declined to say which would be sent for reassignment.

Christopher Curran, a lawyer representing Anthem, said at the hearing that the failure to get a favorable ruling by year-end would doom the deal because Cigna would not agree to an extension.

“We’re in this pickle through no fault of our own,” he said, noting that the Justice Department had taken a year to decide whether it would file a complaint to stop the merger.

John Majoras, the lawyer representing Aetna, pushed at the hearing for a fall trial. He argued that his client’s deal had been announced first and was simpler.

Both deals were announced in July 2015. Anthem’s planned purchase of Cigna is valued at $45 billion while Aetna is paying about $33 billion for Humana. The proposed mergers came as health insurers were contending with new costs and taxes associated with President Barack Obama’s national healthcare reform law, called the Affordable Care Act.

If the mergers went through, No. 1 U.S. insurer UnitedHealth Group Inc would rank as the second after Anthem. Aetna would be No. 3.

(Reporting by Diane Bartz; Editing by Richard Chang)

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