The U.S. Department of Justice and attorneys general from multiple states and the District of Columbia on Thursday asked a federal judge to block Anthem's (ANTM) - Get Report plan to acquire Cigna (CI) - Get Report and Aetna's (AET) proposed acquisition of Humana (HUM) - Get Report .

If carried out, the mergers would reduce the number of major nationwide health insurers from five to three.

No deal could be the best deal for healthcare juggernauts Aetna, Humana, Cigna and Anthem, at least from an investment standpoint.

The four companies saw stocks surge Thursday after news came that the Department of Justice asked a federal judge to block Aetna's acquisition of Humana and Anthem's acquisition of Cigna on an antitrust basis.

Humana's stock hit $170.10, rising 7% since market's open midday Thursday, while its buyer, Aetna saw a smaller pop of 2.7%, reaching $119.67 per share. Meanwhile, Cigna's shares were up 3.5% to $137.76, while Anthem's shares popped 2.8% to $139.29 per share.

Analysts believe the companies could be better off operating separately, with increased competition in the market and opportunities to acquire smaller managed care operations.

Complaints filed by the department and by several state attorneys general in the U.S. District Court for the District of Columbia allege that the two mergers, valued at $54 billion and $37 billion, respectively, would harm healthcare consumers, employers, and doctors and other healthcare providers by "limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs, and lowering the quality of care."

"Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve," said Attorney General Loretta E. Lynch, who unveiled the suits at a press conference at the DOJ's headquarters in Washington. "These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation's health insurance industry to just three large companies. Our actions seek to preserve competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better healthcare for all Americans."

"We all, including seniors, everyday workers and the previously uninsured and underinsured deserve affordable health insurance options," said Principal Deputy Associate Attorney General Bill Baer (pictured with Lynch).

Deputy Assistant Attorney General Sonia Pfaffenroth of the department's antitrust division said that the proposed mergers would eliminate Cigna and Humana as innovative competitors "at a time when competition has been pressuring insurers to develop new models of care designed to keep Americans healthier, to deliver healthcare more efficiently, and to control the costs of providing care."

Eleven states-California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee, and Virginia-and the District of Columbia joined the department's challenge of Anthem's $54 billion acquisition of Cigna. Eight states-Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania, and Virginia-and the District of Columbia joined the department's challenge of Aetna's $37 billion acquisition of Humana.

The suit against Anthem and Cigna alleges that merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver, and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that eliminating Cigna as an independent competitor threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians, and other healthcare providers. The merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry's transition to value-based care.

The Medicare Advantage market is the primary area that would be harmed by merging Aetna and Humana, the DOJ said. Their merger would substantially reduce competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties, the DOJ said. The DOJ noted that before agreeing to acquire Humana, Aetna had aggressively expanded in Medicare Advantage. Aetna is the nation's fourth-largest Medicare Advantage insurer by membership.

It has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation's second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna's purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia, and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets.

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