The U.S. District Court ruling blocking the $37 billion merger of insurers Aetna and Humana will not curb the overall trend toward consolidation in the insurance industry.

In ruling that the Aetna-Humana merger would “substantially lessen” competition in the Medicare Advantage market, the US District court noted government evidence that the merger would result in “presumptively unlawful” market concentration in Medicare Advantage in 364 counties 21 states.

Judge John Bates was not convinced by Aetna’s arguments that the merger’s anticipated efficiencies would reduce costs and benefit consumers, offsetting any negative effects of lessened competition. Nor was the judge impressed by Aetna’s plan to divest some of its plans to the Medicaid insurer Molina.

The Aetna-Humana merger has so much breadth and scale that it’s hard to deny the resulting over-concentration it would create in many markets nationwide. Humana is the nation’s second-largest marketer of Medicare Advantage coverage in the United States (2.7 million MA members), Aetna is fourth (1.4 million). They compete against each other in many of the same markets, and their combination into one carrier would leave consumers with few alternatives, and would give the combined company significant power to demand concessions from local physicians and hospitals.

The same is true in the commercial market within Anthem states for the Anthem-Cigna merger, which has been considered the less-likely of the two deals to succeed. Anthem is the nation’s second-largest commercial insurer, with 24 million commercial lives, while Cigna ranks fourth (12.8 million).

But the trend in healthcare consolidation is still very strong. While these four carriers have been in mega-merger limbo as their court cases moved forward, their major competitors have snapped up some important regional health plans.

Medicaid giant Centene purchased California-based Health Net, Kaiser Permanente has absorbed Group Health in Washington and UnitedHealth Group has moved to acquire Rocky Mountain Health Plans in Colorado. In all three cases, these substantial regional health plans acknowledged the need for economies of scale as the reason for the mergers. UnitedHealth has also bought up some more health provider assets, including Surgical Care Affiliates, a chain of freestanding surgery centers.

Unfortunately for Aetna and Humana, chief rival UnitedHealth also has been gaining MA membership and increasing its plans’ territory for 2017, and expects its 2017 MA membership to top 4.2 million.

The situation for Cigna and Anthem is even more dire. While the two companies’ executives appear to detest each other and may be relieved by the deal’s demise, both companies have spent considerable time, money and effort for nothing. Cigna’s Medicare Advantage plans are under sanction from CMS and the company cannot market new MA plans until it has met CMS requirements. Anthem has significant exposure in the GOP-targeted ACA exchange market, is in need of new pharmacy benefit manager and must pay Cigna a $1.85 billion “reverse termination fee” if the merger deal fails to close. Judge Amy Berman Jackson has not ruled in the case.

Expect to see these healthcare giants continue to buy up smaller plans and make strategic purchases of health services firms and provider assets. While the Trump Administration is likely to take a friendlier view of future mergers generally, mega-mergers of this size may be more trouble than they’re worth.

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