AETNA-PRUDENTIAL: NJ OKs Merger, Deal is Final
"Over the vehement objections of the medical community," New Jersey on Friday became the last state to approve the acquisition of Prudential HealthCare Inc. by Aetna Inc., making Aetna the largest health care insurer in America, with 21 million enrollees. The Bergen Record reports that while state officials said they could "find no basis to deny" the merger, they did put some restrictions on the deal. For instance, Aetna will be required to maintain 90% of the New Jersey Prudential doctors in its network for three years. "We have balanced the business interests of Aetna and Prudential HealthCare with the concerns expressed by consumers and providers," said Health Commissioner Christine Grant. Still, American Medical Association President Dr. Thomas Reardon expressed fear that the merger may tip "the balance of power to insurance companies, giving them too much leverage in their dealings with patients and physicians." But Aetna CEO Richard Huber said, "We will now be able to provide our members with a wider choice of physicians" (Diamond, 8/7). The Wall Street Journal reports that the deal adds 5.5 million members to Aetna's rolls, one million fewer than the 6.6 million it had originally anticipated. Aetna spokesperson Fred Laberge said the drop "mostly resulted from attrition in Prudential HealthCare's indemnity and preferred-provider organization business," and said the company still expects the deal to boost profits this year. Sanford C. Bernstein analyst Kenneth Abramowitz said the membership loss was "only a moderate concern" (8/9). Bloomberg/Dallas Morning News reports that the merger also makes Aetna the largest provider of dental coverage, increasing its membership from about 8 million to 16 million (8/7). Meanwhile, Aetna denied rumors that it plans to buy Oxford Health Plans. In a statement, Aetna said, "We note the rumors in the marketplace that Aetna is planning to purchase Oxford Health Plans. These rumors are not true" (Galewitz, AP/Nando Times, 8/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.