NEW YORK (TheStreet) -- The U.S. Department of Justice's Assistant Attorney General Bill Baer filed a lawsuit in federal court to stop the mergers of health insurance giants Aetna (AET) and Humana (HUM), and of Anthem (ATMN) and Cigna (CI), CNBC's Scott Wapner reported on "Squawk Alley" Thursday.

The deal will reduce the number of large insurance agencies from five to three and give them too much power. It would create too much concentration in the health insurance industry, CNBC's Bertha Coombs reported.

"There's no reason to put the current dynamic in the market at risk by having this concentration," DOJ Assistant Attorney General Bill Baer told CNBC.

If the companies' combined their innovating strategies, Baer believes it would reduce innovation and run the risk of insurance premiums going up.

"We need competition among healthcare providers, doctors, hospitals and providers of insurance so that the market really works and drives quality and price down to the consumer," he said.

The DOJ has investigated this issue in prior mergers and found that Medicare Advantage has unique attractions to consumers and does not compete with traditional Medicare, Baer said.

"We're going to court and we're going to prove that up and demonstrate if you allow this merger to go through in 360 some counties across the nation competition would be impaired," he said.

The companies will make their own decision on whether to participate in the Affordable Care Act exchange or not, he added.

"Reducing the number of people on the exchanges in many markets across the country will injure those consumers, those insured and insured that benefit from competition" Baer said.