- The proposed $34 billion Aetna-Humana will be "very, very carefully" scrutinized by federal regulators to ensure consumers are not adversely affected by how company shareholders will be benefited, William Baer, assistant attorney general for the Department of Justice's Antitrust Division, said during a U.S. subcommittee hearing last week, Insider Louisville reports.
- Shareholders and at least 10 of the 20 states in which the insurance giants operate have already approved the deal but it also has to be authorized by federal antitrust regulators with the purpose of ensuring consolidation does not lead to significantly less competition in the industry.
- If the merger occurs, the number of large national insurance providers would drop from five to three, which has prompted regulators to judge the proposal together with the proposed Cigna-Anthem merger to analyze how both would have an affect on the insurance industry as a whole.
In 2015, the DoJ and the Federal Trade Commission (FTC) filed 17 suits aimed at preventing mergers that would increase prices, or lessen quality or innovation according to their analysis.
Baer told Insider Louisville, “These are transformational mergers in a number of markets, including Medicare Advantage and commercial insurance."
The DoJ is investigating how the mergers would affect cost to consumers and availability of care, costs to local, state, and nationwide employers, as well as competition in local, statewide, and national markets.
Baer called the megamergers a "game changer that demands merger law enforcement officials to scrutinize very, very carefully to make sure we aren’t making a mistake in which shareholders benefit and the consumers pay the cost.”
Aetna and Humana announced their agreement on July 3, 2015 that Aetna would acquire all of Humana's outstanding shares for at total of $37 billion.
During Thursday's hearing Sen. Richard Blumenthal (D-CT) said, "The merger policy of our nation has simply failed," adding, "Consumers have been hit by a tsunami of consolidation, with the same economic effects as a natural disaster tsunami has on people who are in its way."