Under Pressure from Justice Department, Michigan Insurers Spike Merger Plans

As a result, "Blue Care Network and Sparrow decided that the substantial cost and extended time period it could take to gain clearance of the acquisition are not in the best interests of either organization," the statement said.

"Unless we could obtain federal clearance in a relatively short timeframe, which we have been told is not possible, a prolonged period of uncertainty would be extremely difficult for client employers, health plan members, and employees at both organizations," said Kevin Klobucar, BCN president. "It was not a desire of either organization to continue to focus our time and resources to litigate this matter."

"In light of the current regulatory climate, it has become obvious that we should move on and continue focusing on the best ways to serve PHP's members and our region," said PHP Mid-Michigan's President and CEO Scott Wilkerson. "Despite this outcome, we are pleased that PHP has operated on a business-as-usual mindset throughout this lengthy regulatory process."

The Justice Department said it was pleased with the final agreement.

"The merger would have likely led to higher prices, lower levels of service and decreased quality of healthcare for consumers," Varney said.