The companies said Monday that they mutually agreed to scrap the deal, which would have created one of the nation's largest managed-care companies.
The value of United's stock dropped by $2.9 billion just last week, capping a plunge that reduced the amount Humana shareholders would have received under terms of the stock swap to just $3.1 billion.
United's stock value has dropped by 43 percent, or $5.4 billion, since the deal was announced in May.
Last Thursday, United announced it was taking a $900 million restructuring charge, which dealt with job cuts, the sale of various businesses, and the revelation that it was unprofitable in many of its HMO plans. The company's stock dropped by 28 percent.
United, based in Minnetonka, Minn., tried to purchase Louisville, Ky.-based Humana to address ever-increasing competition and rising medical costs. The combined company would have been the largest publicly traded, for-profit health-maintenance organization.
Humana has about 6.2 million customers in its health-care programs located primarily in 16 states and Puerto Rico. In the 1980s, it was known as a pioneer in artificial-heart research.
Together, the companies would have had annual revenue of about $27 billion and health plans in 48 states, Puerto Rico, Hong Kong, Singapore, and South Africa.