Home » Aetna and Humana to defend their pending merger in response to DOJ suit

Aetna and Humana to defend their pending merger in response to DOJ suit

HARTFORD, Conn. & LOUISVILLE, Ky. (Jul. 21, 2016) — Aetna and Humana Inc. today announced plans to defend the companies’ pending merger in response to a U.S. Department of Justice lawsuit seeking to block the transaction. A combined company is in the best interest of consumers, a Humana press release said, particularly seniors seeking affordable, high-quality Medicare Advantage (MA) plans.

According to the press release, the Aetna-Humana transaction offers more Medicare options in more regions. The companies will be able to expand their offerings to more geographies, creating more options for consumers. Aetna and Humana have the greatest number of Medicare Advantage plans rated four stars and higher, and will bring their best practices together.
These options will cost less. By making health care more efficient and effective, Aetna and Humana will eliminate waste and decrease costs for members. These options will come with new products, tools and services.

The press release added: There is robust competition in Medicare. Approximately 70 percent of Medicare beneficiaries elect to participate in traditional Medicare, administered by the government, and that option competes with MA plans administered by companies like Aetna and Humana. Seniors can choose from, or switch between, traditional Medicare and an MA plan every year, or change from one MA plan to another; data show many take advantage of these options. A combined company would serve only 8 percent of total Medicare beneficiaries.
Within MA, there is an abundance of choice for seniors, and built-in protections. In fact, 178 MA organizations offer plans, with 28 new organizations entering MA between 2012 and 2015 alone. Ninety-one percent of Medicare beneficiaries can choose from at least five MA options. Each of these plans faces rigorous government regulation to protect consumers and promote affordability.

To date, regulators in 18 of 20 states where change of control applications are required have approved the transaction, with remaining reviews underway.

Any perceived competition concerns can be addressed through divestitures. Though the companies do not believe divestitures are necessary, significant and well-established industry players have already submitted bids for MA assets in certain states that regulators may require to be divested. Such sales would lead to alternative offerings or new entrants in these areas, protecting competition and consumer choice.

According to the press release: A combined company will result in a broader choice of products, access to higher quality and more affordable care, and a better overall experience for consumers.