Aetna, Humana extend planned merger end date

Dive Brief:

  • Aetna and Humana have extended the deadline to complete their merger from Dec. 31 to Feb. 15 so that a federal judge can rule on the proposed deal, according to a Thursday regulatory filing
  • This is the second delay in finalizing Aetna’s $37 billion acquisition of Humana. Their contractual deadline was originally June 30.
  • Closing statements in an antitrust trial aimed at blocking the megamerger concluded on Wednesday and a decision is anticipated next month, which is what prompted the extension, Louisville Business First reports.

Dive Insight:

Much of the government’s case has focused on concerns that the $37 billion transaction would give Aetna too much control of the Medicare Advantage market, where Humana is also a large player. In arguments earlier this month, the Department of Justice challenged Aetna’s assertion that a planned sell-off of assets would allay those concerns.

Connecticut-based Aetna has agreed to sell $117 million in assets, representing about 290,000 Medicare Advantage members in 21 states, to Molina Healthcare. Federal prosecutors question whether the sale is sufficient to sustain competition in the private Medicare markets where Aetna and Humana operate, and argued that Molina wouldn’t be able to sustain the $400 million in new contracts the purchase would bring, according to Law360.

Molina has dismissed those concerns, saying it will have no trouble absorbing 300,000 new members in 2017.

The DOJ has also maintained that an Aetna-Humana merger would thwart competition for Obamacare exchanges in 17 counties, and accused Aetna of trying to dodge an antitrust bullet by withdrawing from ACA marketplaces in 11 states in August. Aetna said it withdrew from the markets because it was losing money there.

Meanwhile, an antitrust trial against the proposed Anthem-Cigna merger has been playing out in the same courthouse. If both deals were to be approved, three insurance giants would dominate the U.S. health insurance market — the newly combined companies and UnitedHealth Group.

Filed Under: Payer Health Law Finance