Shareholders Approve Merger Between Aetna, Humana
Aetna and Humana shareholders on Monday voted to approve a merger between the two companies, Modern Healthcare reports.
In July, Aetna announced it reached a $37 billion deal to purchase Humana, which could make Aetna the nation's second-largest insurer. A Kaiser Family Foundation report determined, "If the deal between Aetna and Humana proceeds, the consolidated firm would provide coverage to more than one-quarter -- 26% -- of all Medicare Advantage enrollees nationwide, making it the leading Medicare Advantage insurer."
Federal regulators must approve the proposal, and antitrust experts say the Department of Justice and state attorneys general are likely to scrutinize it closely. DOJ is reviewing the deal to determine whether it would "substantially ... lessen competition" and thus violate the Clayton Antitrust Act of 1914 (California Healthline, 9/11).
In addition, the deal must meet certain closing conditions. The two insurers expect the deal to be completed by the second half of 2016 (AP/San Francisco Chronicle, 10/19).
Providers Express Concern
According to Modern Healthcare, the deal could result in additional leverage for insurers when negotiating contracts and rates with health care providers. Providers have expressed concern over potentially being left out of narrow networks.
Bill Bithoney, managing director at BDO Consulting and former CMO of several large health systems, said, "The power of the insurers is becoming ever stronger. The risk of being excluded from the network is a real danger." According to Bithoney, most insurance markets have just three or fewer insurance companies.
Further, Bithoney noted that some providers could pursue mergers of their own to compete with the consolidated insurance companies. He said, "Everyone's afraid," he added, "It's an ever-escalating merger-mania" (Modern Healthcare, 10/19).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.