Predicting diminished competition and likely higher costs, a federal judge rejected health insurer Anthem’s bid to buy rival Cigna.

U.S. District Judge Amy Berman Jackson on Wednesday said the merger would significantly reduce competition in the already concentrated insurance market, particularly for large national employers. Cigna and the Blue Cross-Blue Shield carrier Anthem are two of just four insurers selling coverage to big companies with employees spread across multiple states, and they compete aggressively for business, the judge wrote.

Anthem said it was “significantly disappointed” by the decision and plans to appeal.

Berman Jackson was unconvinced by Anthem’s argument that the $48-billion deal could save money for customers by combining the two insurers’ different approaches to cost saving. Anthem has negotiated lower payments to doctors and hospitals, while Cigna has higher upfront expenses for wellness programs in the hopes of reducing future health expenses.

“Eliminating this competition from the marketplace would diminish the opportunity for the firms’ ideas to be tested and refined, when this is just the sort of innovation the antitrust rules are supposed to foster,” she wrote.

Last month, another federal judge rejected insurer Aetna’s roughly $34-billion bid to buy Medicare Advantage coverage provider Humana Inc., also citing competition concerns.

U.S. District Judge John Bates said federal regulation would probably be “insufficient to prevent the merged firm from raising prices or reducing benefits.” He added that neither new competitors nor an Aetna plan to sell some of the combined company’s business would be enough to ease competitive concerns.

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.