CA reg grants Aetna/Humana merger approval, pins conditions to deal
- Shelley Rouillard, director of the California Department of Managed Health Care, on Monday approved the pending Aetna/Humana merger, The Associated Press reported.
- Aetna agreed to limit small group premium increases as per the approval's conditions. In addition, the insurer agreed to allow for expanded oversight of its rates from the state.
- The jury is still out for the department on its approval for the Anthem/Cigna proposed merger, Business Insurance reported.
Additional conditions from California's approval included that Aetna invest about $50 million "in state consumer assistance programs, dental services for low-income and underserved communities, telehealth services, ACOs, and the expansion of its customer service center in Fresno, California," Business Insurance reported.
The news of the approval comes days after California Insurance Commissioner Dave Jones pleaded to the Department of Justice to block the merger between insurance giants Cigna and Anthem.
As Business Insurance's Shelby Livingston pointed out, analysts expected the Aetna/Humana merger to be less of an uphill battle for California than Cigna/Anthem. One reason is because Anthem and Cigna actually compete with each other in certain markets (like California) and would likely reduce competition in those markets (like California Insurance Commissioner Dave Jones believes).
"Leerink Partners L.L.C. analyst Ana Gupte maintains that the Aetna-Humana deal has an 80% chance of closing, while the Anthem-Cigna deal has a less than 50% chance," Livingston wrote.
The companies require the DOJ's approval along with four more states' to complete the deal. If given the greenlight, the companies expect the merger to close by the end of 2016.
- The Associated Press Aetna-Humana merger gets California regulator's approval
- Business Insurance California agency backs Aetna-Humana merger
Follow Jeff Byers on Twitter