The Justice Department and state attorneys general say the proposed $13 billion merger will give UnitedHealth a wildly unfair advantage over its rivals in the insurance industry.
The U.S. Justice Department has moved to block a UnitedHealth Group subsidiary’s attempted $13 billion acquisition of a medical technology company.
According to The New York Times, the filing is Washington’s latest salvo in the Biden administration’s continued effort to better regulate large corporate acquisitions.
In its lawsuit, the Justice Department alleged that UnitedHealth’s move to purchase Change Healthcare would give UnitedHealth sensitive information that it could use against rival companies in the insurance industry.
“Quality health insurance should be accessible to all Americans,” U.S. Attorney General Merrick Garland said in a statement posted to a Justice Department webpage. “If America’s largest health insurer is permitted to acquire a major rival for critical health care claims technologies, it will undermine competition for health insurance and stifle innovation in the employer health insurance markets.”
“The Justice Department,” Garland said, “is committed to challenging anticompetitive mergers, particularly those at the intersection of health care and data.”
The complaint, adds the New York Times, was filed in U.S. District Court for the District of Columbia.
The lawsuit has since garnered support from the Democratic attorneys general of New York and Minnesota.
However, a spokesperson from the concerned UnitedHealth subsidiary—Optum—has said that the federal government’s “deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system.”
A spokesperson for Change Healthcare, meanwhile, said that is still “working toward closing the merger as we comply with our obligations under the merger agreement.”
Both Optum and Change Healthcare have said that the merge will provide a net benefit for American consumers by improving efficiency in the industry.
The companies also said they have considered selling the part of Change Healthcare which the Justice Department believes will give UnitedHealth an unfair and uncompetitive market advantage.
Minnesota Attorney General Keith Ellison said that an estimated 50 percent of all U.S. healthcare claims pass through Change Healthcare’s electronic data clearinghouse. These claims include other companies’ proprietary claims information.
In a statement announcing the lawsuit, Ellison said that the merger would put too much power in the hands of a single corporation.
“This proposed merger would increase costs and decrease the quality of health care for Minnesotans and all Americans. It would put too much market power and data in the hands of one corporation at so many levels of the health care industry, and that would raise costs and decrease choice for consumers in an already deeply flawed system,” Ellison said in a press release. “Minnesotans and consumers everywhere should have full access to healthcare they can afford — not have health insurance companies attempting to undermine that through monopolistic market dominance. I am joining the Department of Justice and the State of New York in suing United and Change to prevent this merger, to fight against further vertical market integration, and to fight for better service and lower costs to consumers.”
Sources
Justice Dept. Sues to Block $13 Billion Deal by UnitedHealth Group
Justice Department Sues to Block UnitedHealth Group’s Acquisition of Change Healthcare
UnitedHealth Group Will ‘Vigorously’ Defend Against Federal Lawsuit to Block Acquisition
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