About two thirds of states have approved Aetna’s proposed $37 billion acquisition of Louisville-based health care giant Humana and the company expects the deal to close as predicted later this year, said Aetna chairman Mark Bertolini this week.
The revelations came Thursday as Aetna released first-quarter results, which showed that the Connecticut-based insurer had exceeded analysts’ projections.
Bertolini credited the strong start to the year to the company’s Medicaid business, which provides health care for low-income individuals. The company reported growing that segment by 230,000 members during the first quarter over 2015’s first three months.
Aetna, however, has had to withstand harsh criticism of the Humana deal from the American Medical Association and other groups that have told U.S. Justice Department and Federal Trade Commission officials that the purchase will stifle competition and stick consumers with fewer choices and higher prices. State insurance commissions must sign off on the deal, and several, including Kentucky and Florida, have approved it.
But the key is the ongoing review by federal anti-trust regulators.
Aetna executives remain confident, nonetheless, that the deal can close later this year. A company press release quoted Bertolini as saying that “we have obtained approximately two-thirds of the necessary state change of control approvals required to close the transaction, and we continue to cooperate with the Department of Justice as we move toward a combined organization that will accelerate our efforts to build a healthier world.”
Not all states are thrilled about the deal. California’s insurance commissioner Dave Jones told regulators during a recent hearing that such mergers raise prices and reduce access, particularly for people with chronic illnesses, according to Healthcare Dive.
Jones can’t block the deal, but his comments are significant because they add to a volume of concerns from opponents. The companies have defended the merger, insisting that it will trim costs, expand access and improve quality of health care for customers. Executives also have told regulators that the combined companies would save $1.25 billion in 2018.
Healthcare Drive noted that California’s Department of Managed Health Care deemed Aetna’s decision to raise premiums last year on small businesses by 21 percent the fourth increase there since 2013 to be “unreasonable.”
Aetna’s Fran Soistman, who’s in charge of Medicare and Medicaid business, countered that efforts to offer a “range of plans” gives customers working for small businesses adequate options to suit their needs.
Date: April 29, 2016